Franchise department what. What is franchising and what are the benefits of a franchise. Franchise loan

Franchising is a form of cooperation when a well-known brand offers an aspiring entrepreneur to acquire the right to use its name. The subject of sale is not only the name (trade mark), but also technologies, equipment, a package of documents, and a marketing strategy. Together, they constitute a full-fledged business model, which the entrepreneur has the right to use immediately after the purchase.

Important! The franchisor (the selling side) transfers the technology to the franchisee (the buying side) to get the business on track as quickly as possible. The proposed business model is called a franchise.

Franchising principles

Experienced businessmen know that it is extremely difficult to start a business from scratch. Even with an idea, a budget, and an advertisement, it is much more difficult to sell a thing without a story than a Gucci scarf and Versace glasses. It takes years to promote a business; the first months you have to make financial investments without the hope of getting a return. But you have to live on something and feed your family. And then franchising comes to the rescue of a novice businessman.

It is interesting! The word Franchise appeared originally in French, but it was the inhabitants of the English-speaking countries who put into it the economic meaning that it has today. Therefore, the English pronunciation of the word was fixed.

When visiting a Burger club restaurant, putting on shoes from Sali, buying a can of Coca-Cola, a person does not suspect that he is the subject of a franchise. The famous Isaac Singer is considered the first franchisor. By transferring the rights to sell and repair his sewing machines to other businessmen, he spread the prototype of modern franchising throughout the United States.

What is the difference between franchise and franchising

Pros and cons of franchising

The secret of the popularity of this type of entrepreneurship is simple: it is beneficial for both parties. The franchisor benefits from acquiring reliable business partners, controlling its brand and generating additional income. The franchisee's benefit is based on receiving clear and understandable instructions for starting a business and guarantees that the product will be bought and the money spent will be returned.

Disadvantages of the system:

1. dependence of the franchisee on the franchisor - in case of the latter's dishonesty, the entrepreneur will spend money and will not receive the expected effect in return
2. inequality of the transaction - although the nuances of cooperation are negotiated by both parties together, experienced lawyers of the selling party insert clauses into the contract that provide them with benefits in any case.
3. the complexity of civilized franchising in Russian conditions - the imbalance between the standard of living in large cities and regions may lead to the fact that the idea that went off with a bang in Moscow will not arouse any enthusiasm in Saratov or in the Far East.

An additional risk of franchising "in Russian" is the minimum participation of the state in the transaction. In Western countries, franchisees receive benefits from banks and government guarantees; working on franchising gives them benefits. In Russia, this is a business at your own peril and risk; banks refuse soft loans, the success of the business depends on the entrepreneurial spirit and efforts of the franchisee, the honesty and conscientiousness of the franchisor.

The disadvantages of the system lead to the next question: how to minimize the threat of losing money, find a good franchisor, buy a profitable franchise.

How to correctly draw up a franchise agreement

Acquiring rights from famous brands is a win-win, meaning super profits and minimal risk. But the starting capital for buying such a franchise is measured in millions of rubles. A novice businessman cannot afford this option - he is looking for a franchisor with loyal conditions for beginners. This is used by unscrupulous companies that seek to sell air under the guise of a franchise.

What to look for when drawing up a contract

1. Only legal entities can be subjects of the agreement.
2. It is useful to ask Rospatent whether the franchisor legally owns what it sells, and ask for the relevant documents.
3. As in any contract, the rights and obligations of the parties, the amount of the lump-sum (initial) contribution and the percentage of deductions from profits (if any) should be clearly and unambiguously spelled out.
4. Be sure to indicate the scope of the transferred rights: what exactly the buyer pays for. It is important to discuss the time of using someone else's trademark and the issue of competitors' work on their territory.
5. It is advisable to provide for the actions of the parties in case of termination of the contract. This point is often neglected by aspiring businessmen - and they make a mistake. A real merchant must foresee everything.

Important! The general rule is that all questions of future cooperation are clarified in advance and documented.

How to choose the best franchise

Although there is no official graduation, franchisors are divided into those who are interested in their reputation and close cooperation, and those who want to sell more franchises and wash their hands. The first ones put forward detailed conditions and present a list of restrictions. The fact that the owner of the brand cares about how things will go with the charges is a plus. But strict control is sometimes not to the liking of a free businessman. If the terms of the contract are not fulfilled, the franchisor will terminate the relationship and will not return the money.

On the other hand, franchisers of the first category provide start-up entrepreneurs with really working tools. By following their instructions in steps, even an inexperienced franchisee will set up a business and get a legal (and most importantly - quick) profit. Such patrons not only give general recommendations - they offer to help with equipment, materials, teach, tell all the subtleties of the chosen direction literally on their fingers. They are interested in the success of the subsidiary and in making the latter profit.

In a general sense, franchising is the “lease” of a trademark or commercial name. The use of a franchise is regulated by an agreement between the franchisor (the one who provides the franchise) and the franchisee (the one who receives it). The content of the agreement can vary, from simple to very complex, containing the smallest details of the use of the trademark. As a rule, the contract regulates the amount of deductions for the use of the franchise (it can be fixed, one-time for a certain period, constituting a percentage of sales). There may be no requirement for deductions, but in this case the franchisee undertakes to buy from the franchisor a certain amount of goods / works / services.

The terms of use of the trademark / brand can be a separate clause of the agreements. These requirements can be both very simple (for example, the franchisee has the right to use the brand in a specific industry), and strict (for example, the franchisee undertakes to use the equipment in the store in strict accordance with the requirements of the franchisor - from the size and color of shelves to the uniform of the staff).

• the franchisor receives royalties for the use of his trademark;
• the franchisee pays an initial fee for the right to become part of the system;
• the franchisor provides the franchisee with a business management system.

The history of franchising

The prototype of the modern franchising system is considered to be the Singer sewing machine sales and service system. The founder of the world famous Singer Sewing machine company Isaac Singer became the pioneer of modern franchising. Beginning in 1851, the Singer firm entered into a written agreement with distributors of the goods for the transfer of a franchise, the agreement transferred the right to sell and repair sewing machines in a certain territory of the United States.

At the time of the establishment of the world's first full-fledged franchise system, Singer's firm ensured the mass production of sewing machines, which allowed maintaining the most competitive prices, but at the same time did not have an established service system that would allow organizing the maintenance and repair of machines throughout the United States. In this regard, a franchise system was created, which provided financially independent firms with exclusive rights to sell and service sewing machines in a certain territory. These first franchises were, in essence, valid distribution agreements with the additional responsibilities of the franchise (dealer) to service the machines.

Modern franchising has experienced a real upsurge when General Motors began to use franchise dealerships.

Classic commodity franchising, which distributes goods and services in the franchisor-franchisor system, began to change only in the 50s of the last century.

In Russia, franchising has begun to become widespread only in recent years. In particular, most of the chain of grocery discounters Pyaterochka, part of the communication shops of the Euroset company, the electronic card-reference book 2GIS, and the 1C company operate under a franchise scheme.

Franchising under Russian law: commercial concession agreement

In Russian legislation, franchising relations are governed by commercial concession agreement.

Under a commercial concession agreement, one party (rightholder) undertakes to provide the other party (user) for a fee, for a period or without specifying a period, the right to use in the user's business a set of exclusive rights belonging to the rightholder, including the right to a trademark, a service mark, as well as rights to others the objects of exclusive rights provided for by the contract, in particular to a commercial designation, a secret of production (know-how).

The commercial concession agreement provides for the use of a set of exclusive rights, business reputation and commercial experience of the copyright holder in a certain amount (in particular, with the establishment of a minimum and (or) maximum amount of use), with or without an indication of the territory of use in relation to a certain area of \u200b\u200bbusiness (sale of goods received from the copyright holder or produced by the user, carrying out other trading activities, performing work, rendering services).

Commercial organizations and citizens registered as individual entrepreneurs can be parties to a commercial concession agreement.

Franchising benefits

Benefits for the franchisor

For the franchisor, the priority benefit of franchising is that he receives, albeit a small, but guaranteed stable volume of sales of his products, since the franchisee is obliged to buy from him a batch of goods, consumables or other products / services specified by the contract. If the income is stable, then it can be successfully planned for the future, which means that new directions can be developed.
With all this, the franchisor is not burdened with the difficulties associated with a number of costs that ordinary players have - training and recruiting, quality control, etc. In addition, the development of a franchise network is an excellent brand advertisement that does not require special financial investments.

Benefits for franchisees

Using a proven business system

Before offering its franchise on the market, the franchisor must "bring to mind" his business system, work out all business processes and prove the effectiveness of his business. Moreover, for the effective development of the franchise network, the franchisor must have a flagship enterprise, on the basis of which the business is cloned. Therefore, by purchasing a franchise, an entrepreneur acquires an already proven and proven business model that has proven its effectiveness.

The ability to start your own business

Despite the fact that the franchisor has a certain degree of control over the franchisee, which is mainly aimed at increasing the efficiency of partners' activities by identifying possible problems of partner enterprises at the stage of their inception, the franchisee retains economic and legal independence.

Choice of industry

A potential franchisee has the opportunity to get acquainted with the franchisor's business before investing his own funds. This can be done on the basis of open information - the commercial proposal of the franchisor and its operating enterprises, both their own and partnerships.

The ability to reduce risks

By opening a partner company, with a well-developed franchise program, the franchisee becomes part of the "family", that is, unlike an independent company that is opening, the franchisor does not leave partners alone with many problems and risks of a starting business.

Successful market entry guaranteed

One of the main requirements for a franchise business is the demand for goods or services provided by the franchisor company. Therefore, buying a successful business idea and starting its activity under an already well-known brand, the franchisee by the beginning of the opening of his enterprise already has a circle of brand-loyal consumers.

Minimum advertising and marketing costs

Due to the fact that the franchisee begins to operate as part of a well-known network, its initial advertising costs are reduced to providing advertising for the opening of a franchise enterprise in the local market. The same is the case with the current advertising, which is aimed at "promotion" of the franchise network in this particular region.

Gaining access to the knowledge base of the franchisor

The franchisor, providing partners with its business system, transfers not only a well-functioning mechanism, but also “instructions” for its effective use. The franchisor trains its partners on how to effectively build a business, taking into account all its specific features.

Guaranteed supply chain

Since franchising, as a rule, for companies is a priority area of \u200b\u200bactivity, and partners - franchisees - have the best conditions, the franchisor seeks to provide this area with the greatest resources, including supply issues.

Disadvantages of franchising

• Franchisees are forced to follow the rules and restrictions set by the franchisor, even if they do not bring the maximum benefit to the business.
• Franchisees are often required to purchase raw materials and products from suppliers designated by the franchisor, which can limit their access to the free market and force them to buy raw materials and products at inflated prices.
• For franchisees, severe restrictions may be imposed on exiting the business, including a ban on the opening of competing organizations for a certain period or in a certain territory.
• Franchisees are rarely able to influence centralized marketing and advertising issues, but may be forced to pay for centralized marketing and advertising campaigns. Thus, their funds may not be used in their best interests.

Famous franchisor companies

There are many companies that provide turnkey business. It should be noted that the name “franchisor company” does not mean that the company offers all its capacities for franchising, it can have a certain number of objects in its “personal” property.

Notes

Sources

Growth strategy "

• Stephen Spinelli Jr., Robert M. Rosenberg, Sue Burleigh Franchising \u003d Franchising: Pathway to Wealth Creation. - M .: "Williams", 2006. - S. 384. - ISBN 0-13-009717-9

see also

Links

Perhaps everyone dreams of starting their own business. But, unfortunately, not all small entrepreneurs manage to win the competition and take their place under the sun. That is why more and more businessmen prefer this type of activity as franchising.

What is franchising? This means that you will work under the auspices of an already promoted large company. But let's talk about everything in more detail. So...

Franchising - what is it?

Due to the saturation of the market and the high level of competition, not every sane entrepreneur will dare to promote a newly created brand. That is why such type of activity as franchising is becoming more widespread. Perhaps everyone knows what rent is. We are accustomed to that this concept refers to property. in this case we are talking about renting a trademark or brand.

Thus, we can say that franchising is a form of entrepreneurial activity, during which large enterprises (franchisors) transfer to businessmen (franchisees) the right to use a trademark on certain conditions and for an agreed amount of remuneration.

All details of cooperation are reflected in the franchise agreement. The main point is the amount and procedure for paying royalties. Also, this document may display conditions and some restrictions regarding the use of the brand and trademark. The amount of the initial payment is also stipulated, which is a prerequisite for starting a partnership.

How did franchising develop

The development of franchising has a long and rather interesting history. So, the founder of this type of activity is considered to be Singer, who, starting in 1851, began to conclude contracts with certain firms, transferring them the right to sell and service their sewing machines.

By 1920, the so-called commodity franchising began to develop in the United States. It consisted in the fact that large manufacturers set up the sale of their products through large retail chains. In return, sellers received some privileges in terms of price, as well as the ability to use a well-known brand to attract buyers. By the 1930s, this phenomenon had spread to oil refineries, leading to the formation of large networks of gas stations.

Franchising in its modern form originated in 1945. Then the founder of the McDonald's brand bought several successful restaurants and united them under one brand. Soon, the popular network spread throughout the world.

When franchising appeared in Russia

Franchising in Russia originated in the 90s, when large entrepreneurs began to cooperate with well-known foreign firms. The pioneer in this matter was the "Planet of Hospitality". Well-known companies for the manufacture of sports uniforms and equipment have become widespread. The first tour operators also came from abroad. In 1997, a decision was made to found the Russian Franchising Association.

The most famous representatives of this area of \u200b\u200bactivity are the fast food chains "McDonald's", "Subway" and others. Also, widespread cooperation was gained in terms of the manufacture and sale of clothing and footwear. Unfortunately, crisis moments and fluctuations in the economy contribute to the departure of foreign representatives from the Russian market.

Contract

A franchise agreement, in accordance with legal regulations, is called a commercial concession agreement. It implies that one party transfers to the other a certain list of rights to use the trademark for commercial purposes. The document can be unlimited or have a specific expiration date.

The right to use a trademark can provide for unrestricted use of the brand, or it can set certain limits. It is also worth noting that the agreement contains some obligations of the parties. In particular, the user is responsible for maintaining the reputation of the company, as well as using its attributes strictly for the intended purpose.

The parties to the agreement can be legal entities or individual entrepreneurs who are registered in the manner prescribed by law.

Types of franchising

There are several ways to classify this form of activity. In accordance with the most common, the following types of franchising are distinguished:

• By field of activity:
  • trade (implies the sale of goods of a certain brand with the possibility of using its marketing system);
  • service (the franchisee transfers full or partial rights to provide services in accordance with the patented methodology);
  • production (the franchisee receives the technology of manufacturing the goods for use);
  • mixed.
• According to know-how:
  • distribution (sale of goods or provision of services under a certain brand name);
  • business format (the method of doing business and the marketing concept are added to the previous point).
• By system organization:
  • direct (direct agreement between the franchisor and the franchisee);
  • development (the right to open points on the basis of a franchise agreement strictly within a certain territory);
  • master (implies almost complete transfer of rights and obligations).

Forms

There are the following main forms of franchising:

• direct - implies direct contact between the parties to the contract when determining key conditions;
• consistent - is that the recipient is endowed with a number of additional powers;
• sub-franchising - implies that the franchisee has the right to conclude concession agreements as the copyright holder.

Basic conditions

Franchising is of growing interest among domestic entrepreneurs. Proposals on this issue are quite numerous and tempting. However, when deciding on such a deal, you must be prepared to fulfill the following conditions:

• you will have to completely submit to the point of view of the franchisor and accept his philosophy regarding the conduct of business;
• from the moment of signing the contract, you will be obliged to strictly comply with all its conditions (therefore, if you have some comments or suggestions, it is better to discuss them before the transaction is concluded);
• you will have to be in constant communication with the franchisor, discussing all key issues with him;
• the business management mechanism will be similar to that adopted in the parent company of the franchisor;
• you cannot independently turn rationalization ideas into reality without a long discussion of them with the franchisor (and there is no guarantee that you will be given the go-ahead to make changes to the organization of production).

Franchise benefits

Already many entrepreneurs have resorted to such an activity as franchising. In general terms, everyone understands what a trademark lease is. But it is also important to know what benefits the conclusion of such a deal can bring to you. Thus, franchising is characterized by the following positive aspects:

• when starting your own business, you do not have to work out the mechanisms of management and production, because with the acquisition of a franchise you get a well-functioning business system;
• despite the control by the franchisee, you will have a sufficient degree of both legal and economic freedom;
• information about the activities of large firms is often laid out in the public domain, and therefore you have the opportunity to familiarize yourself with the activities of your potential partner even before the transaction is concluded;
• you will hardly be affected by the risks that young companies often face, because the parent company is already well known in the market;
• if you choose the right field of activity in accordance with the needs of consumers, then your business will be successful from the very beginning.

Thus, franchising is an ideal option for your own successful business.

Aspiring entrepreneurs sometimes do not know or do not fully understand some of the terms that are used in the field of business. Frequently asked questions are related concepts such as franchising and franchising, and determining the difference between them.

The growing popularity of such a form of business organization as franchising requires a thorough study of all its features. What are the advantages of this system, are there any disadvantages, and why is it profitable to use a franchise specifically in the field of small business?

Definition of concepts and their difference

Franchise is translated from French as a benefit and means a certain set of documents and rights to use elements of a business. Such elements can be:

• know-how and technology;
• business methods;
• trademarks, brands, logos;
• brands;
• business models;
• software, etc.

In fact, this is the "lease" of a certain brand or trademark, the acquisition of the right to use all its developments, technologies, reputation for obtaining its own benefit in the form of profit. Is the process of buying a franchise itself, a certain agreement between the parties. Simply put, a franchise is a franchise. The parties to this agreement are the franchisor and the franchisee. The first is the one who sells the franchise, the second is the one who buys it.

Also, the contract stipulates the payment of the cost of the franchise. It is carried out in two forms:

• lump-sum payment - a one-time payment of the cost of the franchise;
• royalties - payment of a percentage of the profit received in the course of using a franchise or payment of a fixed payment for a certain period.

• to manufacture products in compliance with the requirements for their quality and applied technologies;
• carry out activities in a strictly established place according to the planned scheme;
• use the franchisor's trademark.

What is a franchise business? An expert in the field gives the answer in the video.

History of origin

The history of franchising takes its toll started more than a century and a half ago, in 1851. Its founder is the owner of a large sewing machine company, Isaac Singer. It was he who first began to sell to independent firms the right to sell, service and repair their products throughout the United States. In this way, Singer not only spread his product over a large area without any effort, but also provided its after-sales service.

The next company is General Motors. Its dealers sold only cars of this company. By contributing financially to the business, dealers were motivated to maintain the reputation of General Motors and to provide quality service in the sale of its products.

After a successful start, it quickly spread to other large companies. Popular drinks producers Coca-Cola and Pepsi they approached it this way: they produced syrup at the main plant, then distributed it to franchisee factories, where the drink acquired the final form of a product and then went to store shelves.

Since the beginning of the 20th century, large manufacturers begin to create and sell their goods to franchisees for their subsequent sale. The seller provided discounts and the ability to use the trademark to small retailers. This way of selling goods exists in modern conditions.

After that (30s. 20 Art.) Franchising spread to the oil industry, namely: petrol stations began to be leased to small local entrepreneurs.

In 1945, confectioners-businessmen Baskin and Robbins began selling some of the new cafes of their rapidly growing chain on terms of using their trademark to outside entrepreneurs. The McDonald brothers have achieved great success in the franchising field. Their fast food restaurants, which opened in the 50s. of the last century, are still very popular and have more than 30 thousand establishments around the world.

Currently franchising is one of the most popular and progressive forms of doing business and is widespread both in the West and in Russia.

Benefits

Doing business through franchising has both positive and negative aspects. This system is most suitable for start-up entrepreneurs who are going to start their own business, but are not confident in their abilities. A franchise provides an opportunity to get your own ready-made business, manage it and gain experience in the business area. In addition, there are below listed advantages of franchising.

Recognizability brand. By purchasing a franchise, you are essentially buying a ready-made business that customers know, recognize and often love. There is no need to spend money on marketing, advertising, technological or design developments.

Minimum risks. The probability of the collapse of a large company is much less than that of a new, unknown enterprise.

Sensation support. Franchisers are interested in maintaining and improving the image of their company, and therefore usually provide assistance to subsidiaries. Consulting, business advice, training in correct management decisions - this is not the whole list of information services that a franchisee can receive.

You can choose an industry of interest to you and study its performance indicatorsbefore starting your own business. Before you spend your money, you will know exactly how soon the investment will pay off and how much the product will be in demand on the market.

Low level of competition. Each franchisee gets its own territory on which to conduct and develop business. There will definitely be no competitors in this territory that could have the same franchise.

disadvantages

You cannot use your ideas or innovations to run a business and must follow a clearly prescribed pattern. Such a business destroys fresh ideas and does not allow the enterprise to develop in a new direction.

Pretty high price franchises. You will need a lot of money to buy it, and it is not known when they will pay off.

Inflexible selection system suppliers. Often, franchisees are forced to purchase raw materials and supplies from those suppliers who are appointed by the franchisor. The terms of such deals are not always favorable.

Narrow framework of activity. By purchasing a franchise and everything that comes with it (brand, trademark, etc.), you also undertake to conduct your business in the direction indicated by the franchisor, without the right to change anything.

Failure to comply with such stringent requirements provides for substantial fines or even deprivation of a franchise.

The risks that are the parent company can still go bankrupt. Or draw up a franchise agreement so that you will not receive any benefit from this transaction. So you need to approach the conclusion of the contract especially carefully, involve experienced and competent lawyers in the case and carefully study the conditions.

Franchise agreement - what is it?

In Russian legislation, franchising is the name of the commercial concession. This term in its meaning fully corresponds to franchising and their definitions are identical. This one consists of several points:

1. The subject of the contract is, in fact, those rights and benefits that are sold to the franchisor.
2. Parties to the contract (copyright holder is the business owner, the user is the buyer of the franchise).
3. The form of the contract (mandatory in writing, registration with the relevant service is also required).
4. Remuneration (royalty) - its amount and method of deduction.
5. Rights and obligations of the parties (both the copyright holder and the user).
6. Limitations of the rights of the parties.
7. Contract time.
8. Change of the contract (in which cases you can change its terms).
9. Termination of the contract (upon expiry of the term or at the request of one of the parties).
10. Responsibility (penalties and fines for violation of the terms of the contract).

Examples of franchising

For better clarity, you can consider examples of the successful sale of franchises of large companies in individual industries.

One of the most prominent representatives of franchising at the world level is the company Ray Kroc's idea to sell franchises to the company in all cities of America has led to the fact that the chain of restaurants currently covers more than 30,000 establishments, and its owner has become a billionaire. Now almost every country in the world has at least one McDonald's restaurant, and those who want to purchase a franchise have rather high requirements.

Another famous example of success is the franchising company, one of the main competitors of McDonald's. It uses the same scheme - selling the rights to a brand, product, trademark and providing complete instructions on how to do business.

Among the automotive companies, the most prominent representatives are the mentioned General Motors and Fordwho use a franchise dealer system to distribute their vehicles to buyers.

The clothing chain does not invest in advertising or marketing, but in opening new points of sale. Thanks to this, the network has 1.5 thousand stores and the brand is recognizable in many countries of the world.

Franchising, despite the presence of certain shortcomings, is an effective form of business organization, especially at the entry level, for entrepreneurs without much work experience or innovative schemes. Such a system allows you to reduce risks, get a recognizable brand and save a lot of effort and money on business promotion.

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Translated from English and French, "franchisee" means preferential, privileged business. This is the name of a type of relationship in the market between two parties: "franchisor" (transferring party) and "franchisee" (receiving party). Cooperation consists in the transfer of a business for royalties (regular payments), which is owned by the franchisor, with the right to conduct business according to an already formed specific business model.

Here, cooperation is considered as one of the formats of licensing activities in the market, within which the franchisor gives the tenant the rights to compensated, commercial actions on his own behalf, under the existing registered mark and trademarks, brands.

Important! The rights and obligations of both parties are governed by the legislation of the state on the territory of which the agreement is concluded.

Rights of the subjects of the agreement

When transferring the rights to conduct business under its own brand, the franchisor retains the following rights:

1. The ability to make direct or indirect deliveries of goods to all potential buyers and consumers within the territory specified in the contract. At the same time, the brand owner has an exclusive opportunity to sell goods, and the territory where the franchisee works may be covered by goods, for which the brand owner is not responsible.
2. The right to change the price list and conditions of sale at any time, he carries out independent commercial activities on his own terms.
3. At its own discretion, change the quality and any signs of the goods and close the production lines producing substandard or substandard types of goods. The conclusion of an agreement with the franchisee does not oblige the franchisor to be engaged in the release of the agreed goods for life.
4. Based on the results of the financial period, conduct an audit of the reporting firm at its own expense - accounting, financial part.
5. Monitor compliance with the rules in the work of the franchisee - from production technology to sanitary and hygienic standards. In case of violations, the contract can be canceled unilaterally, an act of distortion of technology is drawn up with the signature of the inspector.
6. The franchisor gives access to its documentation.
7. The control of the advertising campaign carried out by the franchisee is carried out.

Cleaning company franchise

Important to remember! In the event of a delay in reporting by the franchisee, payment for audit services will be carried out at his expense. The inspection will be scheduled at a convenient time for the franchisor.

The franchisee has the following rights:

• Use ready-made logos and business diagrams received from the parent company;
• Improve business processes;
• Maintain your own pricing policy.

Competent observance of the rules of cooperation allows both parties to successfully earn and conduct joint activities within large networks.

Concession agreement. Obligations and rights of the parties

The relationship between the two parties is regulated through the signing of a commercial concession agreement. According to the terms, the copyright holder gives the user, for a certain fee, the right to conduct commercial activities using the franchisor's complex of developments. These include a trademark (brand), know-how, business reputation, work experience.

The documents provide for an indication of the territory in which the concluded agreement is valid, the minimum and maximum volumes of used production facilities within the framework of a specific type of work and type of business.

Both individuals and legal entities can be participants in the concession agreement.

It is important to note! The contract stipulates the obligations of the parties, which are observed in order to avoid breaking the agreement.

The obligations of the franchisor are divided into two types: mandatory and not subject to change, and dispositive - by-laws, but subject to changes through the agreement. Among the obligations are the following:

• Calculation of the amount of royalties for the provided brand and the procedure for registration of the transfer of rights. Determination of fees - from service to initial, other payments that depend on the features of the system.
• Providing access to the tenant of all necessary technical information, standards, instructions.
• Quality control throughout the licensing system.
• Support for all participants in the process - from management advice to staff development.
• Negotiating with major suppliers, concluding production contracts for license buyers.
• An indication of the conditions for the termination of joint activities, they are standard.

Home Business Franchise

Responsibilities of the franchisee:

• Pay a fee for using the license and pay fees in the future;
• Maintain a conditional level of quality of goods and services;
• Do not cooperate with brand competitors;
• Make active use of the rented brand.

How to become a franchisor or franchisee

To start carrying out activities in the field of concession agreements, they choose a certain brand and act according to the following scheme.

A future franchisor can work like this:

1. Make an assessment of the firm's activities. It is important to adequately measure, by a number of parameters, the effectiveness of business methods, the efficiency of schemes, the experience of a company that has been operating on the market for at least 12 months. Profit should not be based on unstable fashion, and a product or service should not have too many external threats and competitors.
2. Assess the profitability of your own future work. It is important to develop a business plan, build development and directions for profit growth.
3. To understand what is the uniqueness of the company and whether it will be a resource for further growth in the market, whether it is easy to match the acquired franchise.
4. Create a range of proposals: develop know-how, logos, prepare workable business processes.
5. Make a calculation of the cost of the future partnership.
6. Prepare a package of services for the implementation of the license.
7. Find suitable buyers on exchanges, through ads and advertisements.