The Pros And Cons Of Franchising

There are around one million franchise businesses available nationwide and about a third of retail sales in the United States take place in franchising. Franchising businesses can vary from automobiles, food, gas, clothing etc. Franchising can be established when a business owner wants to grow the businesses goods and services through a licensing agreement. Franchising began to develop in the post war era around the 1950’s to 1960’s. Many common franchisors of convenience goods and services available today such as McDonalds, Hotels, and KFC chicken began to pop up in every corner. Even though franchises had success they began to focus more on sales instead of the quality and the operation of their establishments. This lead to problems and the lack of care

In a Franchise it is basically take all or nothing. Even with that being said if the franchise is successfully established and you’re putting your money to a validated system, there should be no doubt. A franchise can be placed into three simple groups such as Product distributorships, for example a car dealership, when the franchisee has the right to sell the products. Trade mark and trade-name licensing is a group of franchising that the franchisee has the license to market the brand of the company such as coca cola. Business format licensing is another group where the franchisor provides the franchisee with everything needed to begin the business and operate it with the set procedures they have established. An example would be Wendy’s lending out their trademark and the right to the entire business model. The entire business model could mean how much meat you use in the burgers or what they put on them. The franchisee can even get consultation and training from the franchisor. The franchisor is trying to build the same experience customers have at the original Wendy’s in the franchisee’s