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Franchise Information for Successful Business Ownership

You see the signboard of McDonalds and go inside without thinking twice. But McDonalds in Nigeria is not the same as you find in New York. Or is it? This is a business model that allows a big multinational corporation to operate units in many parts of the world under the same trademark or logo. This is a system that has grown very popular and allows a company to get financial benefits without having to set up business bearing all the costs involved in other countries as all cost is borne by another party known as franchisee while the parent company, also known as franchisor, gives rights to the franchisee to freely use its trademark and logo while at the same time providing all training and advise needed by the franchisee. World over, McDonalds and KFC are some of the finest examples of franchises. However, it should not be misconstrued that it is only restaurants only where franchise system works as today there are financial franchises as well. Let us take a closer look. A financial franchise works on the same lines as a franchise in the field of restaurants. However, banks and other financial institutions operating in many countries are not examples of financial franchises as they are rather termed as branches of that bank or financial institution. So if you find ABN or HSBC bank operating in an African or Asian country, it merely means the bank has a branch in these countries. However, if there is a mutual fund company appointing franchises in other countries providing all technical help and advice and allowing the party to make use of its logo getting financial benefit in exchange, the system is termed a financial franchise and not a branch of that mutual fund company. The terms and conditions in this system are not same in all cases and are often different depending upon the relations between the parties as well as the laws in the country where financial franchise has been granted to a party. For example, if there is a broking company that is very popular and allows parties to open similar business models in their countries, it can charge an upfront fee for the log as well as technical knowledge and advice given to the party, including its staff. Among other terms, it is obligatory on the part of the franchisor to share technical expertise to allow party or franchisee to have more earning opportunities.