Franchising - a private business under the well-known brand, which is akin to a marriage of convenience.After it, each party gets some benefit.
creation tool business
Franchising - a purchase is not ready for sale, and a tool with which you can create a profit and meet other needs of the franchisee, in conjunction with the instructions for use of the instrument.
How do I know how much it corresponds to the presentation of the real business format and is not a cover, prepared an experienced professional consultant?To do this, it is important to learn the business reputation of the company and the period of its operation in the market (including through the Internet and social networks), reviews of former employees, staff turnover, extensive network, product range and service quality, opinions of entrepreneurs, has acquired the franchise.
What is franchising-book?
Instructions for use franchise called franchising, beech, and, as a rule, contains instructions for the operation, product description, product, services, standards, sales, personnel management standards.At its core, this is a great intellectual treasure, which is often underestimated.
It also includes components used singly: the standard for opening with step by step description of the procedure, a brand book, which describes the use of visual elements of the brand in certain situations, merchandising-book for clothing stores and boutiques.
Franchising: franchise, lump-sum payment and royalties to the franchise agreement
Relationship franchisor and franchisee in Russia in terms of the acquisition of intellectual property are governed by the contract of franchise.It prescribes the distribution of areas of responsibility and control between the parties, the terms of the franchise as an object of intellectual property, mechanism of collecting payments, such as lump-sum payment and royalties.The postings are specialists accounting in accordance with paragraph 4 PBU 14/2000, take into account the exclusive rights to use the trademark as part of intangible assets.
period for which the contract is concluded, depending on the scope.For stores, as a rule, the term of a standard lease agreement, which is three to five years.When you open a business, which requires considerable investment, such as a fitness center, the period may be longer: 10-15 years."McDonald's" is valid for 25 years.
Types restrictions franchised
avoid possible future abuse by franchisees in contracts related to the provision of the franchise in catering or some services can legitimately be included restrictions in the form of prohibition to engage in this kind of business inwithin a certain period.Also, the contract may contain restrictions on the repurchase of the franchisor point of sale when certain conditions with the description of the circuit calculating the amount of repurchase.
Forms of payment of buying a franchise
When choosing a franchise of various companies represented grocery stores, clothing stores, fast food restaurants or hotels, the attention of potential franchisees, among other things, drawn to the size of the down payment, which largely determines the need for investment to implement the newproject.Most often, a lump-sum fee includes the component for the use of intangible resources such as brand, material and component in the form of signs and other elements.
There are two forms of payment for the franchise:
- Entry or the lump-sum, fee-called fixed.
- Royalty - fee in the form of regular payments.
What is the lump-sum payment and royalties?Since the implementation of the franchise entails certain costs for their payments the company resorted to levy lump-sum payment.He paid a one-time after the conclusion of the contract, and are a kind of payment for entry into the system of relations, called franchising.Forms of payment
royalty
Royalty - this time payment for the use of the brand, appears in two forms: as a percentage of turnover or profit, and fixed the amount of payment.Selecting a form of payment and royalty depends on how the franchisor can control the cash flow of the company, the franchisee.
For example, if companies linked by a common database, as is the case when you open a clothing store, the franchisor may bind royalty amount to the percentage of sales or profits, demonstrating their responsibility and interest in the development of the franchisee.Otherwise, it may set a fixed amount of regular payments.
Factors determining the size of the lump-sum payment
size lump-sum payment for each franchise could differ materially due to various factors determining its value, namely:
- costs associated with the design of commercial and administrative area of the new store.
- costs due to equipment and a complete set of the trading floor.
- costs of delivery of advertising materials.
- costs associated with the implementation of standards of sales and training needs of administrative and managerial staff and line personnel.If the company-franchisor sells a business format, a significant part of its sales are standards that are embodied in people.Those franchisees whose personnel follows the standards of sales and provides high service, creates a sustainable competitive advantage.That is why it is so important to train staff, especially in the provision of services.
- need for the introduction of accounting systems, installation of computer programs.
- size of the potential franchisee profits due the acquisition of this type of franchise.
Currently, the highest rate observed lump-sum payment in the hotel business, where the size of a one-time payment for the right to purchase a franchise can range from 3 to 4 million rubles.For comparison: Clothing for joining this board in a system of relationships can range from 700 to 1.5 thousand. Rubles.
Franchise royalties and no lump-sum payment
Among the proposals, particularly in the area of trade franchise, you can find a significant number of franchises, lump-sum payment in the provision of which will be charged.Development plans of some companies, including the network of grocery stores "Pyaterochka", multi-brand store "Fashion Territory" involving the rendering of a franchise without charging lump-sum payment.The policy of these companies aims to expand the network by attracting new partners and offer them advantageous economic terms conditions.
In the event that the terms of the trading range of the new franchise stores will be presented exclusively products of the franchisor, the cost of providing it, and other related expenses can be carried forward and included in the cost of goods.This franchise, in which the lump-sum payment will be charged, allows due to expansion of the network and the joint building a successful business to increase the popularity of the brand and ensure the growth of profitability.
