Franchising

1. Introductory Speech:

Today’s business world is very much competitive. That’s why in current world business situation, only entrepreneurial skill is not enough to be successful in short term. If experience and goodwill of famous companies can be used with your talent then it could be a better decision and success will be possible within a short period of time.

 

2. Franchising:

Franchising is the practice of using another firm's successful business model. Franchising is a system used by a company (franchisor) that grants others (franchisees) the right and license (franchise) to market a product or service under the franchiser’s trade names, trademarks, service marks, know-how and method of doing business.

The following are the summary about Franchising:

a)      There is a contractual relationship, with right and responsibilities of each party defined, for a specified period of time.

b)      It allows the entrepreneur to use all the knowhow and experience of the parent company, such as the name, logo, production techniques, training methods, and expertise.

c)      The purpose of the relationship is the efficient distribution of a product or services.

d)     The franchisee usually adds operating capital as well as managerial resources for the operation

3. Historical Evolution of Franchising:

Many believe that Albert Singer, founder of the Singer sewing machine, was the initiator of franchising. However, the concept of franchising really began long before.

During the 1840's, several German started franchising through ale brewers.

Franchising then traveled from European brewers into the United States.

Albert Singer in 1851 with the Singer Sewing Machine Company made use of franchising. He is the first actual name recognized as an early franchisor.

In the late 1800's and early 1900's many other forms of franchising took place.

The modern leading form of franchising, known as business format franchising, became popular post World War II.

4. Why Franchising?

The nature of franchise business is the recent innovation in the form of business.  The main purposes that are set to be achieved through franchise business include the following:

1.      To restore individual entrepreneurship.

2.      To provide an easily recognized and accepted product or service.

3.      To compete with big business.

4.      To allow consumers to buy good quality item or services at the right price yet still deal with a local merchant.

5.      To provide entrepreneurs a means to enter business with a low capital investment and risk.

The nature of franchise business usually fits in the process of small business. Entrepreneurial initiatives can get access to extra-territorial business through franchise. One can get to business with much of technical & financial arrangement.

So, in conclusion we can say that,

“Buying a Franchise a Good Way of an Individual Setting up a Business”