What Is Franchising ?

Business format Franchising in India is defined as an agreement between two parties, namely the franchiser and the franchisee. The franchiser grants the franchisee the right to use its trademark as well as certain business systems and processes, to produce and market a certain good or service.  

Business Format :

Business format Franchising in India is defined as an agreement between two parties, namely the franchiser and the franchisee. The franchiser grants the franchisee the right to use its trademark as well as certain business systems and processes, to produce and market a certain good or service.The franchisee may get the required training and support necessary to make an individual understand the parameters of his franchise and the challenges ahead.

Franchise Agreement :

The franchise agreement or a legal contract between the two parties sets the rights of the franchisee and the franchiser. It ascertains how long the arrangement will be valid for. The percentage return on investment, the time period of the return of investment along with the training details are mentioned in the agreement.Major firms and brands get to expand there business through franchising and you as a franchiser get to reap benefits of an established brand name. The advantages for both the parties involved are mentioned in the agreement.You need not come up with a new idea. A typical franchise agreement contains

• Franchise Disclosure Document (FDD)
• Disclosures required by state laws
• Parties defined in the agreement
• Recitals, such as Ownership of System, and Objectives of Parties
• Definitions, such as Agreement, Territory Area, Area Licensor, Authorized Deals, Total Receipts, License Network, System Manual.
• Licensed Rights, such as Territory, Rights Reserved, Term and Renewal, Minimum Performance Standard

Franchise Business :

There are big franchisee business which have national advertising campaigns and a great trading name. The best franchise businesses will provide elaborate training programmes in sales, marketing and all the business skills necessary.The best franchise businesses will assist in secure funding for your investment and also discounted bulk purchase for the outlets when you are operating.The customers know that you are operating a franchise business, which automatically builds a trust that you provide the finest possible value for money and high quality services.

Franchisee and Franchisor :

  Every franchise outlet or unit is operated by the franchisee. The franchiser takes control on the way in which the services or the products are sold and also the quality of the way his trade name is being sold.

• The franchiser will get an initial fee from the franchisee along with the ongoing management service fees on the basis of a percentage of yearly turnover.
• The best franchise businesses will assist in secure funding for your investment and also discounted bulk purchase for the outlets when you are operating.The customers know that you are operating a franchise business, which automatically builds a trust that you provide the finest possible value for money and high quality services.

The franchiser has to support the franchise network with training, development of product, marketing and advertising and promotional activities.