FRANCHISING FACTS
FOR YOURSELF, NOT BY YOURSELF
The reason for franchising is simple. You are in business for yourself, but never by yourself. Most independent business people have their hands full just operating the business from day to day. Long term planning, strategic analysis, market research, and organization are difficult if not impossible. One of the greatest values of a franchise is the support staff and multifaceted organization that are behind the business owner. They have the ability to draw upon this important resource in truly managing the business successfully.
WHAT IS A FRANCHISE?
A franchise is the agreement or license between two legally independent parties which gives:
-a person or group of people (franchisee) the right to market a product or service using the trademark or trade name of another business (franchisor)
-the franchisee the right to market a product or service using the operating methods of the franchisor -the franchisee the obligation to pay the franchisor fees for these rights
-the franchisor the obligation to provide rights and support to franchisees
WHAT IS A FRANCHISE CONSULTANT?
The role of the franchise consultant is similar to a coach, advisor or recruiter for a franchise candidate. They are to be a trusted advisor who can guide a candidate through the sales process, giving them the information they need at each step of the sales process.
Franchise consultants do not sell a franchise; they teach clients how to make the selection themselves. The franchise consultant guides a client ensuring that all pertinent data is available for the candidate to make an educated, informed decision.
TAKE ANOTHER STEP TO SUCCESS. TODAY.
COMMON FRANCHISE TERMS
FDD
Franchise Disclosure Document: the disclosure document provides information about the franchisor and franchise system.
Business format franchise
This type of franchise includes not only a product, service and trademark, but also the complete method to conduct the business itself, such as the marketing plan and operations manual.
Franchisee
The person or company that gets the rights from the franchisor to do business under the franchisor’s trademark or trade name.
Franchise Agreement
The legal, written contract between the franchisor and franchisee which tells each party what each is supposed to do.
Franchising
A method of business expansion characterized by a trademark license, payment of fees, and significant assistance and/or control.
Franchisor
The person or company that grants the franchisee the right to do business under their trademark or trade name.
Product Distribution Franchisee
A franchise where the franchisee simply sells the franchisor’s products without using the franchisor’s method of conducting business.
Royalty
The regular payment made by the franchisee to the franchisor, usually based on a percentage of the franchisee’s gross sales.