Who Is a Franchisee? What Is a Franchise?

Have you ever wondered who is a franchisee and what is a franchise? These are very common terms for people who are a part of business and the business already has a good branding. Let us delve deeper into what is a franchise and who is a franchisee.

what is a franchise? A franchise is an authorization that is granted by a business or a company to a group of individuals or an individual to carry out the commercial activities that are carried out by this business.

There are different forms of doing business and franchising is one medium through which business can be conducted. It is hailed as a popular method and a powerful marketing tool too for huge businesses to go on an expansion mode for their business and by doing so enhance their market share considerably with rapid speed but with low costs. There are different types of franchise options that people can find out in the market but identifying the one that gives them great returns is the key to success. There are the distributorships, brand name licensing or trademark options and the business format franchises.

The franchisor offers the franchise with the license to sell the products or services and also implement similar business techniques. The franchisee pays an initial amount to get this right and from there on he pays a certain percentage of the gross sale to the franchisor. This agreement may last through the term decided upon in the contract. The franchisee gains all those privileges that the franchisor's business has and in addition to that will also receive pertinent training in the relevant field. Coupled to this training the franchise will also continue to receive ongoing support. Of course, there are a few additional responsibilities too which the franchisee has to be careful about.

The franchisee has to work towards meeting all the quality controls that have been set up by the franchisor for it is the brand reputation that may be at stake when things are not done in line with the guidelines provided by the franchisor. There may also be a few restrictions on the kind of sales and operations they can perform on the name of the company.

Franchisees definitely have clear-cut advantage over their competitors, especially the nonfranchisee ones as they have full liberty to use the already established brand names. The nonfranchisee however has to start from the scratch and there may be a lot of time that goes in as an investment too before they can actually witness profits. A franchisee however can adhere to the franchisor's business practices and provide quality goods and services to the customers.