What is a commercial concession?

A few decades ago, local entrepreneurs were not clear, the term "commercial concession".At present, this procedure is widely used.So, commercial concession is the provision of one entrepreneur to another set of rights to their own business, including the trademark, logo, secret production technology, copyright and innovation.But at the same time, the rights holder can control absolutely all aspects of the business.

This procedure is called franchising.With the help of the right holder to create a unified network of production facilities.At the international level, commercial concession is classified into three main blocks:

  1. Production or working in the industrial sector.
  2. services or work in the service sector.
  3. Sales of goods and services.

business practice "franchise" allows the owner to maximize his business not only within one country, but also abroad.In addition, from a legal point of view of the concession agreement is considered appropriate solution that eliminates the need to create a mu

lti-branch network, expanding the department of accounting and tighter control.A user who receives rights, has a huge advantage over all competitors, as the time to market under the well-known and recognized logo, which greatly facilitates the process of attracting consumer groups and advertising campaign.

It was noted that among the participants of the transaction is a bilateral agreement under which the user receives a set of rights to use certain privileges belonging to the franchisor.Last receives monetary compensation in return.The contract can be signed for a specific period of time or wear perpetuity.Moreover, it should be made clear on which aspects of the business user gets right.The system is subject to government regulation of franchising by issuing special laws and regulations.

The main feature of this agreement is its nature of a paid, ie the granting of any rights should be rewarded without fail.However, if the agreement does not indicate the amount of the payment, it will still be considered valid.Just the amount of compensation is measured based on the market prices of similar services.If we talk about the practical application of this feature, it is often the franchisor require prior payment for the use of the trademark and other privileges, and thereafter it will be deducted from a fixed percentage of revenue received.

In addition, the contract is in writing and the procedure must be certified by the signatures of the parties.A verbal agreement is considered null and void and no legal force has not.Commercial concession is a procedure that not only provides certain rights to the participants of the transaction, but also imposes very specific responsibilities.The owner of the rights of the other party shall provide all the necessary documentation with license agreements, description of the process and so on.Throughout the term of the contractual relationship, he is obliged on demand to provide consulting services relating to the subtleties of your own business.

Purchaser shall dispose of the rights granted privileges within the limits set out in the agreement.In addition, it is responsible for the compliance of the quality of manufactured goods product quality rightholder.Therefore, in terms of production activities, he must clearly comply with all technological requirements.It also undertakes to keep a trade secret and is responsible for the dissemination of secret documents.