Understanding Franchising
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Having written “Understanding Life Cycle Financing- What an entrepreneur should know”, “Financing Entrepreneurial Ventures—What an Entrepreneur needs to know”, “Understanding Debt Financing- What an Entrepreneur Should Know”, this article “Understanding Franchising” is a highly resource article.
What is franchising?
Franchising is a marketing system by which the owner of a service, trade marked product or business format grants exclusive rights to an individual for the local distribution and/or sale of the service or product, and in turn receives payment of a franchise fee, royalties and the promise of conformance to quality standards. The Franchisor is the seller of the franchise and the franchisee is the buyer.
Types of Franchises
Here are three available types of franchises. The first type is the dealership, a form commonly found in the automobile industry. Here, manufacturers use franchises to distribute their product lines. These dealerships act as the retail stores for the manufacturer. In some instances, they are required to meet quotas and conditions established by the manufacturers, but as is the case for franchise, they benefit from the advertising and management support provided by the franchisor.
The second is the type that offers a name, image and method of doing business. There are many of these types of franchises and their listing, with pertinent information, can be found in various sources.
A third type of franchise offers services. These include personnel agencies, income tax preparation companies, and real estate agencies. These franchises have established names and reputation and methods of doing business. In some instances such as real estate, the franchise has actually been operating a business and then applies to become a member of the franchise.
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Comments
Hello kazeemjames01,
Thank you so much for becoming a fan and sending me fan mail. I am not the most educated person but to have someone like yourself write to me to tell me job well done is very much a compliment. Thank you.
I also never truly understand the topic at hand. You write about it very well and describe it in a way for someone like myself to truly grasp what I was reading.
Anette, you description helped too. I have always been intimidated when it comes to any business. You helped me understand even more. Thank you.
I will read more of your informative Hubs and do find the topic of writing very interesting.
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Thank You for visiting my hubs. I am honored to join your club. This is a simple, understanding , informative hub. I like simplicity. You express your self very well. You look like (3 guess's) Ok time is up. Will Smith. Are you him? I will return.
Best regards Hugs
Hy kazeemjames01:
A very interesting Hub once again! I found a magazine yesterday that is about Franchises in the UK, there are USA franchise magazines too! A person could have a franchise for as little as £5,000, or less than $10,000. That's not bad! A very informative info-laiden Hub!
@cheeky girl and everybody................you need to do your own "due dilligence" on the franchise you are thinking of....however, I quite belief that the franchise business is a good development, however, again, carry out your own due dilligence
KazeemJames01:
I'm very grateful for your compliments on my Hubs and am honored to be your fan as well!
Albeit I write and operate from a spiritual/artistic standpoint, your hubs reflect a like integrity of thought, research and compassion.
Having worked in the real estate industry, I truly appreciate your "due diligence" comment as far too many getting involved in any business dealings don't take the time to learn the "rules of the game" in their localized venue (state, city, etc.)-- and then erroneously blame others when something goes awry for not having done the work for them. And regulatory and even business history information is so accessible these days.
Kudos! And ashe!
Thank you for sharing this information. Very well done.
Highly informative and educative; extremely useful. Thanks for it.
Thanks for becoming a fan, your hubs are a very useful read
Great Hub
i'm a fan of your hubs now, will be the first to read them, keep up the good work
i'm a fan of your hubs now, will be the first to read them, keep up the good work
You are a very good writer. Kudos.
Annette says:
2 months ago
Good info. Other ways of describing the types are a franchise that uses a particular business format. This would be permission to to operate a business using a specific business method, name and trademark. A "product" franchise, which is the license to sell a product made by a particular manufacturer; and a "manufacturing" franchise, which is the ability to manufacture & sell a product.