That is franchising

Today, the term is increasingly sounds like among experienced businessmen, and among those who are just planning to do their own thing.Let's see what the franchise, what benefits it provides and what you need to take into account with this method of business organization.

essence and concept

The roots of the word originates from the French franchir, which translates to "liberate" and is closely related to the provision in 1559 of rights and freedoms the bishops.Responding to a question about what the franchise should be noted that he appeared in the Middle Ages, when kings of Britain granted the right to receive his barons to certain territories taxes in exchange for other services.At the same time free men could get approval for a fee to trade at fairs and markets of the city.Special places in which they sell their products, had its own name - franchises.

In our time, in the broadest sense, franchising means "rent" a commercial designation or trademark.Today, instead of inventing something new, you can simply buy a successful business, and enjoy the benefits have already been tested and proven products and services.Economists are telling in their articles that is a franchise, define it as a kind of business in which the franchisor (the company owner) transmits the franchisee (the so-called host company or an independent businessman) the right to sell their products in exchange for mandatory execution of the specific conditions.These include:

  • compliance with the specific quality characteristics;
  • use of certain technologies;
  • business organization under the trademark specified by the scheme developed and clearly specified location.

Franchising - examples of successful schemes

In Russia, this kind of business became popular around the second half of the 90s.Prior to that time in our country, very few people knew what a franchise and what advantages it has.Now, according to various estimates of experts in the Russian market successfully operating over 200 franchise companies.Among them are such well-recognized brand names as Xerox, Subway, Kodak, Baskin Robbins, Alphagraphics and others.

According to the rating published in the Russian version of the publication Forbes, the most profitable franchise in 2013 demonstrated the partners of the company "Felix" (production and sale of furniture).The profitability of the business under this trademark is often reaches 40%.Second place went to the company "Crossroads Express" (a network of retail outlets in the house), and the third - "Positronics" (a network of shops selling electronics).

Cons franchise

Ready and proven business plan, almost zero risk, belonging to the advertised trade network and ready for the start of the business base - is, of course, sounds great.But do not forget about the negative aspects.The first of them - a loss of autonomy: the entire entrepreneurial activity becomes after the conclusion of the respective contract strictly limited the rules of the franchisor.In addition, working with a well known company involves substantial monthly payments, and it can cause a painful blow to profits.The third negative point is the fact that all the participants of the franchise network are closely related to each other and an error of any of them may lead to losses the rest.However, there is no business that would guarantee 100% success.Someone franchise fits, someone - no.In any case, if you meet a very profitable franchise, why not take advantage?It's much easier than starting from scratch.