Franchising

                                        

         Franchise is the rights provided by a franchise contract.It is an option to enter a small business.It is an agreement,which grants the right to use a brand name for specific activity in return for a royalty.It is getting popular.It is one of the best ways to succeed in small businesses.Franchising is a marketing system whereby an individual owner conducts business according to the terms and conditions set by the franchiser.It is marketing for well-known brands or trademark.It provides exclusive rights for local distribution of specific products or service to franchise.It involves payment of royalty by the franchise to the franchisor.It covers a specific territory.
The types of franchise are:-

• Product franchise-It is used to distribute products.Franchise receives products from the franchisor.He sells them through retail business.It is also known as Trade Name franchise.A retail business can have franchise agreements with various manufactures.
• Service franchise-The franchise recives a license to use the established names to sell particular services.The frachisor controls standardization features.Accounting firms,consultants,beauty saloons use such franchise.
• Business Franchise-This involves franchising of entire business enterprise.There is a commom trade name.The appearance,products,packaging and operating procedures of the establishment are standardized.The franchisor maintains inspection and control over the business operations.Quality performance is assured.Examples are McDonald,Pizza Hut, Archies card shop.