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𝕎𝕙𝕒𝕥 𝕚𝕤 𝕗𝕣𝕒𝕟𝕔𝕙𝕚𝕤𝕚𝕟𝕘?

Franchising means when we use the business model of some other form or business house which was successful.

The origin of word franchise is from Anglo French word ‘Frankese’ which means to release.

This word can be used as a verb and noun both.

Basically this concept came when the business houses wanted to expand their business but they didn't have enough fund or they don't wanted to park their fund in fixed investment such as properties or building spaces and offices. So what they do is they give their business model to other individuals or group of people. The individuals or groups is responsible to arrange for the office space and make investment in the franchisor allows the person to use the name of brand of his / her and charger fees called ‘Royalty’ for sharing the business idea /secret/ model.

Franchising helps the MNC'S and other foreign outlets to easily enter into a market of other countries with involvement of much investment.

𝕌𝕤𝕖𝕤 𝕠𝕗 𝕗𝕣𝕒𝕟𝕔𝕙𝕚𝕤𝕚𝕟𝕘:

Franchising is beneficial for such business houses and such areas of business which can be easily modelled and standardized. It is also beneficial for that business organisation which do not want to permanently park their resources in fixed investment. All the successful food chain brands, all over the world follow this concept and is trying to expands its business.

The benefit of franchising is the person with surplus funds can start a good business easily in the goodwill and trademark of some other company which has built over the years and can encash goodwill easily.

𝕋𝕪𝕡𝕖𝕤 𝕠𝕗 𝕗𝕣𝕒𝕟𝕔𝕙𝕚𝕤𝕚𝕟𝕘:

Franchising can be divided into three types:

1. Small Franchising: The franchising which are limited to branch or block areas or up to a small village or city.

2. Medium Franchising: The franchising which covers a district or a bigger area as compared to a small franchising.

3. Big Franchising: Big franchising is the one which covers a whole city area or a metro city area or equivalent.

ℍ𝕚𝕤𝕥𝕠𝕣𝕪 𝕒𝕟𝕕 𝔻𝕖𝕧𝕖𝕝𝕠𝕡𝕞𝕖𝕟𝕥 𝕠𝕗 𝔽𝕣𝕒𝕟𝕔𝕙𝕚𝕤𝕚𝕟𝕘:

America is the place where, the concept of franchising first came into existence. In the decade of 1930, this concept became very popular among the Americans when the franchising of fast food chain, restaurants and hotels started. In the year 2001, in the United States of America a total of 7,63,483 organisations were involved in the business of franchising.

Franchise is such a kind of business model which was utilised in more and more countries by various companies:-

1) Subway Sandwiche & Salads.

2) Mac Donald's, Cafe Coffee Day.

3) 7 eleven inc.

4) Hampton Inns and Sweets.

5) Supercuts Salons.

6) H & R Block.

7) Mini Markets.

8) Survey Pro.

9) Johnny King.

10) Inkin Donuts.

America has clearly laws enacted fore franchising and even China has adopted clear law for franchising. Brazil and France have also adapted such kind of law. Law in Brazil is most stringent.

Where there are no laws adopted, franchising is governed by contract entered. Trademark is accordingly with enough protection.

According to International Franchising Association:

United States of America provide 4% of the total trade in the franchise in business.

Generally the US law district and important by the franchising authority. And most countries need it to study so that they can help understand the concept better and product small franchise in their country. In addition to trademarks, copyrights and such ownership service are also given importance in law and introduced in law.

𝔽𝕣𝕒𝕟𝕔𝕙𝕚𝕤𝕖 𝔹𝕦𝕤𝕚𝕟𝕖𝕤𝕤 𝕚𝕟 𝕀𝕟𝕕𝕚𝕒:

Franchising of goods and services in India is in its childhood stage. In the first International exhibition for franchising held in the year 2009, large entrepreneurs ine India came forward, invade the biggest company that showed interest was McDonald's.

Franchise is a contract between the franchiser and franchising agency in India,  which is governed by the contract act 1872 specific relief act, 1963, which provide for the resolution in the contract as a compensation for the specific enforcement of the rules and the breach of the contract.

𝕀𝕞𝕡𝕠𝕣𝕥𝕒𝕟𝕥 ℙ𝕠𝕚𝕟𝕥𝕤 ℝ𝕖𝕝𝕒𝕥𝕖𝕕 𝕥𝕠 𝔽𝕣𝕒𝕟𝕔𝕙𝕚𝕤𝕚𝕟𝕘:

1). Any franchise has to make two important payments that is for The trademark and that trained in an advisory service is given as a royalty, both of which can be added and given as a single time payment to the franchisor as per the terms of contract entered. Franchising also have some disclosure requirements which of franchising has to disclose to its franchisor.

2). Most franchisees are for a certain period and for specific areas and at a distance of special miles,

3). Franchise is simply a temporary business investment, it is not to buy a business for the eternity. The one who is franchising doesn't get the ownership of the business, it's too higher for a certain period in exchange of royalty.

4). Franchisees may be specific or non specific, such disclosures can be made an agreement entered, also the revenue and benefits can also be specifically disclosed in it.

5). National and international advertising, training and other support services are provided by the franchisor.

Thus, franchise is the only way through which venture capital investment can be achieved without the control of the chain operation and the transmission system can be built for its services. 

ℝ𝕖𝕤𝕡𝕠𝕟𝕤𝕚𝕓𝕚𝕝𝕚𝕥𝕚𝕖𝕤 𝕠𝕗 𝕥𝕙𝕖 𝕡𝕒𝕣𝕥𝕚𝕖𝕤 𝕚𝕤 𝕚𝕟 𝕥𝕙𝕖 𝕗𝕣𝕒𝕟𝕔𝕙𝕚𝕤𝕚𝕟𝕘:

Each side of the franchise will have a safe defensive, for the franchise, the most important thing is the protection of the information, maintenance of trade secrets, control over the business. For this, the franchise is have to provide services for which the trade mark was built and made famous.

The franchisees have to display symbols, trademarks and logos of the franchisor at the working place of franchise. Uniforms worn by the employees of franchisees should be of a special colour, should be served in the same manner as the services provided in the successful operation of the franchisee. Like in retail business there is no total control on the business of franchise.

𝕃𝕚𝕞𝕚𝕥𝕒𝕥𝕚𝕠𝕟 𝕠𝕗 𝕗𝕣𝕒𝕟𝕔𝕙𝕚𝕤𝕚𝕟𝕘:

1). In low cost franchises, the training fees is heavier.

2). The franchise contract doesn't have any guarantee or warranty and in the event of a dispute, the franchise has not most legal provisions to protect their interest. Most of the contracts of franchising are largely favouring the franchisor and tailor made as per their requirement. The franchisee is at the utmost raised in the business because he/she will have to pay the royalty even if he/she is suffering from loss.

3). Franchisor doesn't guarantee any sort of success in the market. They don't Care the responsibility of the failure.

ℂ𝕠𝕟𝕔𝕝𝕦𝕤𝕚𝕠𝕟:

Franchising is based on the marketing concept which can be adopted by an organisation as a strategy for business expansion. Where implemented, franchisor licenses it's know how, procedure, intellectual property, use of its business model, brand and rights to sell its branded products and services to a franchise.

In the return the franchise a certain fees and agrees to comply with certain obligations, typically set out in a franchise agreement.

𝕋𝕙𝕒𝕟𝕜 𝕪𝕠𝕦 𝕗𝕠𝕣 𝕧𝕚𝕤𝕚𝕥𝕚𝕟𝕘.