Franchisee: A Wise Businessman Of a Modern Business World International defines
Franchise
franchisee
Association
as
an
(IFA)
agreement
between two firms in which one is a franchise and other is a buyer of franchise in which it gives: A person possessing the right to sell a service or product using the brand name of another trademarked business The franchisee has the right to use the operating methods of the original trade company The right to franchisor to charge fees of rights and support given to the person taking the franchise. A pooling of capabilities and resources is what franchising is all about. It is a comprehensive
business
relationship,
thereby
creating
considerable
interdependence between the franchisor and the franchisee. The large scale franchisors have built a network of franchisees consisting of single unit owners as wells as multi-unit owners.
The multi-unit owners typically have
business track record and experience with franchising. The most celebrated and well known franchise businesses have outgrown their basic beginnings and have become established entities in towns throughout the U.S. However, a majority of franchise businesses are comprised of mainly small businesses, a majority of them having less than 100 units. Franchise Business Models Product distribution and business format are the two common and most popular forms of Franchising. Product distribution franchise: This is a type of franchises that sells or distributes the franchisor’s products through a supplier-dealer relationship. Trademark and logo
are been assigned as a part of license but the entire running operation is not given to the franchise firm. Most common example to explain product distribution kind of franchise is dealership through authorized dealer. Gasoline, soft drinks, DVD/ CD kiosks, and automobiles (cars, bikes, etc.), etc. are the industries where this type of franchising is practiced. Business format franchises: In this type of franchise distribution format, the trade mark brand gives the entire rights to the person taking up the franchise of using the pre–determined methodologies of his/her company. After the franchise agreement is signed and authorization is given to the person taking the franchise, along with the trade mark and logo, the entire operation of services and products of the particular business/firm is given to the new business person taking up the franchise. Entire marketing strategy and business development plans along with the computer operations and other such technical and managerial support and development is given to the franchisee and thus the entire business rights are given to him/her at the cost of right selling license. Some very well – known franchises for sale practicing such format are from the food industry and have been successful throughout the world.