What is a Franchise?
A franchisee pays a fee to participate in the franchise system. It is important for the franchisee to understand that the franchise fee allows the franchisee to gain admittance into the system. The franchisor has already gone through the learning curve and created an operating system that can be duplicated by the franchisee. By having a system in place the franchisee will be able to avoid the mistakes of starting from scratch. Don’t reinvent the wheel.
A franchise system includes a marketable brand, marketing plans, operating procedures and operational support. You are a business owner with a license to operate under a brand with specific operating procedures. You are in business for yourself but not by yourself. The system has requirements that must be followed. You are not in complete control of every aspect of your business but this is why you chose a franchise. You give up some control for the privilege to participate in a proven and successful system. You will join other like-minded entrepreneurs and strengthen the brand with the goal of a mutually beneficial relationship for the franchisee and the franchisor. The goals will be aligned with the ultimate goal to be the best brand in your industry.
A franchisor chooses franchising to develop the brand and gain greater market share. Franchising creates local ownership, which by nature insures an aggressive approach on the local franchise territory by the franchisee. Local owners will always work harder than if employees were hired. A franchisee injects capital and “sweat equity” into the system and builds a strong brand. |
