By purchasing a franchise, the company gets the right to operate under the name of the seller and use its business technology (including trademark, assortment, advertising policy, etc.). In this case, the selling party is called the franchisor, and the buying party is called the franchisee. A franchise agreement resembles a lease agreement, since the right to use the brand is temporary, and the franchisee, in addition to the initial payment or purchase, is obliged to regularly pay monthly installments. The cost of a franchise depends on many factors, but in any case, it is not small. In addition, other large costs may arise. Sometimes you even have to buy premises, since the requirements of some franchisors do not allow doing business in rented premises (for example, McDonald's works). It would seem that by acquiring an already well-functioning system of work, reputation and support of the "senior" enterprise, the company should avoid many problems that lie in wait for any young enterprise at the beginning of the journey. After all, you will have to go along the "trodden path". But here, too, there may be pitfalls and certain risks. aturally, the brand owner strives to maximize his interests. Therefore, the terms of the contract may not be very beneficial for the buyer, and the scope for creative business is very limited, or even impossible. Important: before concluding a deal, carefully study the contract. At the same time, it is highly desirable to use the help of competent lawyers in order to protect yourself from possible difficulties and risks.
More here -https://www.worldbank.org/
Comments