Franchise_Susan Ward

Definition:

When people speak of franchises, they are usually referring to business format franchises. Such a franchise is essentially a business clone.

The franchisor has developed a system for reproducing his business (often right down to the last detail). When you buy a franchise, you rent the franchisor's trademark and method of doing business. The method of doing business involves a standardized approach to delivering a product or service.

In fact, many franchises are offered as turnkey business opportunities; all you, as the franchisee, need to do is walk in and "turn the key" to get the business up and running.

Buying a franchise is a popular choice for starting a business because the assumption is that the franchisor is selling business success; he or she has created a successful business, and therefore, the franchise business you buy will automatically be successful, too.

This is not necessarily so.

Buying a franchise is also popular because most franchisors offer some degree of ongoing marketing and operational support. For example, as a franchisee, your business may benefit from the franchisor's marketing campaigns, or have lower inventory costs because of the franchisor's suppliers.

On the other hand, the degree of ongoing control that some franchisors exert may be excruciating.

Anyone considering buying a franchise needs to carefully investigate all aspects of the franchisor - franchisee relationship, as well as the track record of the particular franchise.

Also Known As: Franchising, turnkey operation.

Common Misspellings: Franchize, Fanchise.

Examples:

Buying a franchise was attractive to Trevor because he really liked the idea of having a management team behind him.

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Reference :

- http://sbinfocanada.about.com/od/startup/g/franchise.htm