What is a franchise?
![]() A franchise is basicaly an agreement or license between two parties which gives a person or group of people (the franchisee) the rights to market a product or service using the trade mark of another business (the franchisor).  The franchisee has the rights to market a product or service using operating methods already proven by the franchisor. The franchisee is obligated to pay the franchisor certian fees and royalties in exchange for these rights. Franchising – the Basics – how does it Work?Certain outlets of Macdonalds and KFC are classic examples of succsessful franchises, in both instances the franchisee has purchased the right to operate under a recognised Brand. In a basic franchising arrangement the franchisor has developed a system for conducting business. The system has been found to be successful. The franchisor wishing to emulate the success of that business system, usually in a different geographic area, establishes a blueprint for others also wishing to emulate this success to operate the same business using the same name and same systems.  Advantages of Owning a Franchise
The main advantage of owning a franchise is the feeling of freedom that being self-employed brings. This freedom is tempered with the knowledge that the owner has invested in a proven system and has the training, support and encouragement of other franchisees and the franchisor.
Owning a franchise should also provide a semi-monopoly environment in which to conduct business in a particular area. Generally, there is also an informed ready-made customer base. There will of course be competitors but the franchisee will be granted the sole franchise for a given area and often will be given client listings or job sheets.
Most importantly though, being part of a franchise ensures the franchisee is part of an instantly recognisable brand, the product or service expectations that a brand brings, and the reputation gained by the brand over time.
A franchise also offers the franchisee with the ability to capitalise on the know-how and systems that have been proven to be successful. The quality of the product or service provided is therefore in many ways guaranteed. Some of the advantages a franchise offers are:
* Freedom of employment
* Proven product or service outcomes
* Semi-monopoly; defined territory or geographical boundaries
* Proven brand, trade mark, recognition
* Shared marketing, advertising, business launch campaign costs
* Industry know-how
* Reduced risk of failure
* Access to proprietary products or services
* Bulk buying advantages
* On-going research and development
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