ranchise magazine | Article
FRANCHISING
FAQ
Working within the franchising industry for as long as By Nick James, Franchise Central
I have, I get asked many questions from franchisees, franchisors and those considering to become either or. Here I have compiled a list of the questions I get asked most frequently and answer them for you.
What is franchising? Franchising is a method of distributing products or services. At least two levels of people are involved in the franchise system; 1. The franchisor, who lends the trademark and, most importantly, the business system to, 2. The franchisee, who pays a royalty and often an initial fee for the right to do business under the Franchisor’s name and system. Technically, a franchise is the contract binding the two parties, but this term is often used to mean the actual business that the Franchisee buys from the Franchisor. Technically, the contract binding the two parties is the franchise, but that term is often used to mean the actual business that the franchisee buys from the franchisor.
How widespread is franchising? In 1988 there were only 184 franchise systems in Australia! Today, Franchising in Australia represents a dynamic small business sector and comprises enterprising entrepreneurs 56 | Franchise Magazine March - April 2012