Lessons Learned About Options

A Good Explanation of Franchising Franchising is simply put as giving of rights to operate in the same products as the mother company to another business in another geographical location, away from the original business. The franchise could be simply compared to leasing or renting for an opportunity. The Mother Company is now referred to as the franchisor while the business that gets the permission to operate is called the franchise. The franchisee is required to pay to the franchisor some money to be allowed to operate. The original company requires to be paid a commission of what the franchise sells. The payments that the franchise is supposed to pay the franchisor include the trademark’s royalty, the cost of training and advice services, and a percentage of each unit sold. The fate of the franchisor heavily depends on the franchisee success or failure. The franchisee’s period of operation is limited to the franchise agreement. However the franchise agreement could be renewed every time it expires. Every single franchise is supposed to operate at the agreed location. The franchisor protects the trademark while the franchise is charged with the obligation of carrying out the services which the trademark entails.
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Franchisees could exist as single or multi-franchisee. The franchise that operates more than one unit is called a multi-franchise while a franchise that operates one unit is called a single franchise.
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The franchisor and the multi-franchisee agree on what number of units to open and in what period and in a specific geographical region. A unique agreement for each unit of the franchise is set. The popularity of multi-franchise is very high. The popularity of the multi-franchises has risen in the recent past. To set up multi-franchises high levels of investments are required. High level of stability is provided by the multi-franchises. Since the multi-franchises operate in diverse locations their level of success is very high. One single franchise may not be as successful as multi-franchise. One location that a single franchise operates from might disadvantage it. The success of multi-franchises lies in their popularity. The franchisors may encourage the multi-franchises when they see huge potential in them. The other advantage with the multi-franchise is that when one unit seems not to be doing great, the other units may come in and help to revive them. Good researchers should be done to establish the viability of multi-franchises. For the multi-franchise to thrive it is advisable to have ready cash and other forms of investments.