Franchising

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|Franchising                                                                                                                                 |
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|             “Franchising can be defined as a system based on a close and ongoing collaboration whereby a company, the franchisor, gets     |
|into partnership with one or several companies, the franchisee(s). Its prime aim is to develop a franchise concept designed in the first   |
|place by the franchisor.” (Internet, 1) In order to better understand the concept of franchising I will first explain several commonly used|
|terms in this concept. Ø Franchise is a legal agreement that allows one organization with a product, idea, name or trademark to transmit   |
|some rights and information about a business to an independent business owner, which in return pays a fee and royalties to the owner. Ø     |
|Franchisor is a company that owns a product, service, trademark or business format and provides this to a business owner in return for a   |
|fee. Franchisor often is the one that makes the conditions under which a business owner operates, however he doesn’t control the business. |
|Ø Franchisee is a business owner who purchases a franchise from franchisor and operates a business using the name, product, business format|
|and other items provided by the franchisor. Ø Franchise fee is a one time paid fee by the franchisee to the franchisor, and is paid for     |
|rights to use trademark, management assistance and some other services. Ø Royalty fee is a fee continuously paid by the franchisee to the   |...