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Understanding the franchising concept

Franchise is a continuing business relationship with legal agreements between two organizations; that allows one organization (called franchisor) which owns a product, service, idea, trade name or trademark to transmit some business rights (business name, marketing and distribution) to the other one (called franchisee), which in return pays an initial fee and continuing royalties to the owner (franchisor) for these rights, plus some other managerial services (such as training, consultation or technical support) for a fixed period of time.

It is considered as a marketing concept with an innovative method of distributing merchandise and services. It is also considered as an extremely successful and growing aspect across the globe.

Under specific conditions like transparency, favorable legal terms& conditions, financial means and proper market research, franchising can be considered as success wheels for both franchisor and franchisee.

Before we are going to discover the franchising business models and conception, we have to spot on franchising related business vocabulary.

Franchise business vocabulary

– Franchisor: is an organization that owns a product, service, trademark or business format and provides this to another independent business owner in return for a fee.

Franchisor often is the one that makes the conditions under which a business owner operates; however he doesn’t control the business.

– Franchisee: is a business owner who purchases a franchise from franchisor and operates a business using the name, product, business format and other items provided by the franchisor.

– Franchise fee: is a onetime paid fee by the franchisee to the franchisor, and is paid for rights to use trademark, management assistance and some other services.

– Royalty fee: is a fee continuously paid by the franchisee to the franchisor- usually paid as a percent of gross revenue earned.

– Trademark: is a distinctive name or/and symbol used to distinguish a particular product or service from all the others.

– Franchise trade rule: is a law by the Federal Trade Commission that places several legal requirements on the franchisors.

Types of franchise

There are lots of types and models of business franchise that are varying in accordance to the different business models; but they are mainly should be categorized under one of the following three types:

1- Management Franchise

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Management franchise is a form of service agreement whereby the franchisee provides the management expertise, format and/or procedure for operating the business; hence he manages the business operation whilst depending on his employees to handle the required work flow till delivering the required service.

Management experience is far more important for running a management franchise than industry experience, as operation management will account for the most of time that the franchisee spends in the business.

This type of franchise includes a wide range of businesses especially that focus on in services industry, like procurement experts, cost management services, home care providers, commercial and domestic cleaning, financial services, recruitment, property services, gyms, school management, hospitality and hotel management.

2- Product franchise

It has two main types according to the business model and the agreed rights that are given by the franchisor to the franchisee.

– Product distribution franchise:

Within this model of franchise, franchisor gives the franchisee only the rights to sell and distribute products that are ready made by franchisor and under his trade name.

Car dealers and agents are perfect example for this type of franchise.

– Product manufacturing franchise:

In manufacturing franchises, the franchisor allows a franchisee to produce products under their brand name and trademark.

Food and drinks manufacturing companies considered the most popular example for that type of franchise, where they are manufacturing products under trade mark of the franchisor.

3- Business format franchise

It is considered the fastest-growing type of franchising and has absolutely expanded to every sector of the global economy. It has significantly more opportunities than the other types of franchise.

It differs from other types of franchise in that franchisor gives the franchisee the complete prescribed business format, that means it provides the franchisee with deep knowledge and information concerning operational insights and almost all of the business aspects like business management& operations, training, financing& accounting systems, price suggestions, marketing& promotion, site selection& grand opening plans or even legal support.

This type of franchising facilitates the expansion of the franchisor’s business by providing proven businesses opportunities with already established brand names to new franchisees, which considered a perfect opportunity for them that cut off time consumption, testing & launching headache and many other risk factors that they may face in case of launching a new business individually with new brand names or trademarks.

How could Future Experts consultants boost your franchise business?

Either you are a franchisor, a franchisee or even just beginner and would like to learn more about opportunities in franchising. From early stage start-ups to mature, well known and branded clients, we are ready to offer a comprehensive franchise consultation services. Our veteran franchise business consultation team is ready to support you with franchising business overview, guidance and hands-on franchise consultation and/ or any required franchising data that could boost your business.

Within our long years of experience working with global network of franchisors and franchisees, we provide comprehensive and intuitive franchise business assistance and step- by- step consultation.

For franchisors

We believe that the setup of a franchisable business model requires lots of resources, experience and considerable amount of time. The most critical part in business model development is to establish the best model within its prototype. We are ready to be involved with full support within every stage of your startup progress, from the fundamental stage of brainstorming business ideas to prototype final transformation for to create a robust and successful franchise model.

Future Experts franchise consultants follow creative, professional and strategic approach for developing all types of franchise marketing tools and materials. We pay special attention in guiding our clients for tailored powerful and relevant franchise marketing channels from offline (seminars, franchise fairs, printed materials and advertising media) to online (digital marketing, web and mobile apps design and development) in addition to our resources and extensive network of potential contacts, hence we master lead generation process.

Whatever you already have a franchised trademarks and planning for more expansion, or looking for reliable hands-on consultation to get your business franchised, just contact us.

For future franchisees

have access to real time Franchisor information, history and data, a deep and thorough understanding of Franchisor contracts, demographic information on market relevancy, and exclusive funding opportunities through the most technologically advanced search platform in the industry making it quick and easy to match client’s needs with the best Franchise Opportunity for them.

If you would like to start your own business or become self-employed, then buying an established franchise is a great place to start. With an experienced franchisor taking care of customer support and providing everything you need to get started, the only risk you have to take is the initial investment.

For more information on how and where to get real franchise opportunities, don’t hesitate to contact us.

Summary

Service Type

Franchising support-future experts consultant

Provider Name

Future Experts Consultant,

Ba- Abdullah Building- Qasim Zeinah st., Alrawdah, Jeddah, KSA.,Alrawdah, Jeddah,Kingdom Saudi Araia-3529 - Jeddah 23424-6365,
Telephone No.00966560555532

Area

consultation

Description

Franchise is a continuing business relationship with legal agreements between two organizations; that allows one organization which owns a product, to the other one which in return pays an initial fee and continuing royalties to the owner for these rights, plus some other managerial services for a fixed period of time.