Franchising - the kind of relationship between market actors, when one party (the franchisor) transfers to another party (franchisee) for a fee right to a certain type of business, using the developed business model of reference. This advanced form of licensing, in which one party (the franchisor) grants another party (franchisee) the right to gratuitous act on its behalf, using the trademarks and / or brand franchisor.
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Minuses |
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Franchisor |
Franchisee |
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- The relationship between the effectiveness of third-party companies; - Difficulties in the rupture of relations with franchisees, not complying with the conditions of the agreement; - The existence of certain problems in the quality control of goods (services) provided to franchisees, which is due to its relative independence; - The negative impact on the image of the franchise effective and market brand reputation; - The contribution to late or underpayment; - The probability of disclosure of trade secrets; - Exit from the franchise system of spectacular franchisees who canceled the contract with the franchisor to open your own business, in fact, become direct competitors to the franchisor. |
- Restrictions on the freedom of decision-making; - Inability to quickly break the franchise agreement; - Possible competition from other franchisees and the franchisor directly; - Lack of support from the franchisor otgovorennym contrary to the agreement obligations; - Dependence on the financial stability of the franchisor; - The risk of re-evaluation and a positive image of the brand promise and / or the franchisor's trademark, etc. |
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Pluses |
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Franchisor |
Franchisee |
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- Guaranteed-stable obym sales; - Stable income; - Ability to develop new directions; - No difficulties with a number of expenses; - The development of the franchise network is a great brand advertising that do not require financial investment. |
- Using a proven business system; - Ability to start their own business; - Choice of the industry; - Ability to reduce risks; - Ensuring a successful market entry; - Minimum cost of advertising and marketing; - Access to Knowledge franchisor; - Guaranteed delivery system. |
