Under the franchise system refers to a particular business. She has two elements – the franchisor and the franchisee. The first sells its brand, business systems, as well as know-how and second, first making an initial payment and then make payments every month – royalties.
This system provides a successful business idea, tested by time. In addition, it provides support, training, supply, development, marketing and advertising. Thus, the franchisee receives proven “recipes business. Franchisor tells him about his experiences, both positive and negative. It also provides franchisees industrial structure and business methods. It is for these reasons, buying a franchise is much more profitable than an independent company.
Franchisee starts a new business, and thus can protect themselves from many problems. As a result, his business quickly gets on his feet as opposed to those who are trying to conduct business independently.
Leading positions in the development of franchising is America. The first experience in franchising there was connected with the production of sewing machine “Singer”.
It should be noted that in this country about 80% of new companies go bankrupt in 5-7 years of existence and among the franchise companies, only 10%. Franchising – a major source of discovery and development of new companies.
In France in 1951 were 600 franchise systems, which include more than 30 thousand companies. In England, there were 432 systems and 18.6 thousand enterprises. In America from 1975 to 1995 the number of workers involved in the franchising enterprises rose from 3.5 to 8 million is an average of ten people at one company.
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