This strange and incomprehensible to us, the term means only a special kind of business. Moreover this is a very efficient form for us. This niche is not so much in demand.
Franchising is an agreement based on contracts “franchises”. Its essence is that a large company entitles a small private company to conduct its business within the stipulated time frame and in the specified location.
Often this aid assists the entrepreneur to make the right choice shopping area, get a loan, etc. But the main thing that provides a “parent” company to his partner – is the ability to sell goods or services under its own brand.
During this entrepreneur pays an entrance fee and deducts a certain percentage of sales “parents”. In addition, he must acquire the necessary equipment from the “parent” company. Togo, who has paid the franchisor for the right to conduct its business, called the franchisee. Franchisor provides the franchisee a proven business idea, training, marketing, advertising; pass on their experience, both positive and negative. He gives his business practices. It is for this reason work on the franchising agreement is better than having your own business. Franchisee is an opportunity to open a new case and avoid many mistakes.
U.S is the leading countries in the development of franchise systems. The very first franchise in this country was the launch of sewing machines. In America, about 80% of new firms go bankrupt in 5-7 years. As for firms that conduct their activities on the franchise system, among them only 10% go bankrupt.
Franchising is a powerful source for the formation of new independent companies. In 1991 in England, there were 432 franchise systems, in France – 600. In America from 1975 to 1995 the number of workers employed in franchises has increased from 3, 5 million to 8 millionin our country, franchising is just beginning to develop. The most well-known companies, working on a franchising agreement include McDonald’s, “Reebok”, “Kompyuterlend”, “Baksin Robinz” and others. Our first franchise now becomes “Doka Pizza” and “Doc-bread. Today they have a network consisting of more than 300 branches.
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