What is a franchise?
In simple and accessible language, it isAcquisition of the right to use a well-known brand for profit. Some businessmen believe that it is much more profitable to buy a franchise and start one's own business on a brand that has been promoted than to promote one's business from scratch.
And they are partly right.
Let's understand in such concept as a franchise, and also we will consider the order of its registration.
Features of the franchise agreement
The concept of "franchise" came from the FrenchWords, which in Russian translation sounds like a "privilege". From the economic point of view, to buy a franchise means to conclude an agreement with a company that has a well-known brand. For example, the network of fast food restaurants "Subway" has more than 30 thousand points of sale. And all this thanks to the franchise.
A person who wants to acquire rights toThe use of a trademark is called a franchisee. In addition to the promoted brand, he receives the necessary materials for work, training, advice and support. That is, the entrepreneur, making out the franchise agreement, draws up some kind of insurance against risks. In addition, he can at any time turn to the franchisor for support and advice. All these conditions are prescribed in the contract.
Of course, to start your business on the already preparedSoil is much easier, because people are already familiar with the brand (that is, you do not need to spend money on advertising). In addition, in the learning process, you will get a great deal of experience in running and running a business.
How to get a franchise?
First of all, you must determine the amount,Which you can invest in a franchise. This fee is called a lump sum. For example, to conclude an agreement with the founders of "Subway" you will need to pay an amount equal to $ 12,000 (excluding VAT). In addition, in the process of working on the basis of the contract you will pay 8% of the turnover, this fee is called royalty.
In order to maximally profitable to buy a franchise,Address to the lawyers engaged in this direction. Experts will be able to select a list of companies for you, provide the most complete information about their field of activity. If you want to save money, you can choose the company yourself. For this, be sure to conduct a detailed analysis of all available proposals (you can find them on the Internet).
Conduct market research. Perhaps in your area there will be no demand for the sphere of activity that you want to do. For example, in an area where the population mainly consists of older people, it is not advisable to open a chain of fast food restaurants.
Be sure to check with the franchise ownerThe estimated cost of launching a new sales point. For example, if you consider the trademark "Subway", here the cost of opening a restaurant will be about 100-200 thousand dollars (all depends on the area of the point). A very important indicator is the payback period of the project. You can also provide this information to your companions. When concluding the contract, be sure to specify what is included in the cost of the franchise. It is better to analyze all the points of the legal document with a lawyer, so you will avoid many problems.
Pros and Cons of a Franchise
Of course, like any direction, the franchise hasAdvantages and disadvantages. The pluses include getting a promoted brand, high speed of business development, detailed instructions on how to run your business, advertising support. In addition, franchise owners give a guarantee in the exclusivity of business in your region. Let's say you decided to sign a contract with the fast food network "Subway". The founders give you a guarantee that you will work under this brand in your area alone.
A significant disadvantage is the high cost of thisdirections. In addition, trademark owners put forward very strict requirements, which you can not neglect. For example, in a contract there can be a provision about the presence of your own trading premises, that is, you do not have the right to lease it. You do not have the right to come up with anything new and start your own, even if customers ask you to do it (organize holidays, etc.).
A few years ago the concept of "franchise" wasKnown only to advanced entrepreneurs. Currently, almost every person who decided to open a business, asks himself: what is a franchise and how to get it. As you can see, it's quite easy to make out, but we need money, and quite a few. Therefore, if you are constrained in the material plan, try to create your own brand. Perhaps in the future you will also own a franchise, and it is you who will be paid money to use your trademark.