Franchise News

Franchise Information for Successful Business Ownership

The dictionary definition of the word franchise as a verb refers to the act of legally transferring the rights to sell a commodity or the right to use the names or trademarks of the company from one entity to another. In all cases, the franchising company, legally referred to as the franchisor is usually a well established company that is seeking to spread wider by opening more stores in different areas. The word franchise also has a definition as a noun. A franchise is a store of a major company or corporation that has been legally taken over to some extent by another company or lone investor who pays the mother corporation for the use of its name or trademarks. The franchise definition is therefore the status that the new branch or store of the major company acquires as a direct result of the legal transfer of the rights mentioned. Usually, the process of franchising is directed and protected by an elaborate legal system. There are a number of legal requirements that have to be fulfilled by both parties before the franchising can be said to be complete. Franchising has become very popular in the recent years as many people consider a franchise to be the definition and the route to investment without risk. It is for precisely this reason that franchises are also usually referred to as ‘turn key’ investments. The investor, in this case referred to as the franchisee is analogized to some one turning the key to open the door to a new house. The analogy is drawn from the fact that most of the business enterprises that normally franchise are firms that are already established and reaping some good returns from the market. As such, the franchisee, by buying the franchise, is simply investing in a tested enterprise that is guaranteed to succeed. In addition to the assured success, the franchisees are also able to enjoy other services that the franchisor offers. The franchise itself is by definition still a part of the large corporation that issued it in the first place. It continues to bear the names and other identification marks of the parent company. Therefore, whenever the parent company, or the franchisor, advertises itself or its products, all the smaller franchises also benefit from the adverts. However, even in the light of all thee benefits that can be accrued as a result of franchising, the eventual success or failure of the franchise rests on the shoulders of the franchisee.