What Is A Franchise: How Does A Franchise Work?
- businessinadelaide
- Nov 11, 2024
- 1 min read
A franchise is a business model where an individual or group (franchisee) is granted the rights to operate a business using the branding, systems, and support of an established company (franchisor). This arrangement allows the franchisee to sell the franchisor's products or services under its established brand, following its operational guidelines. In return, the franchisee pays an initial franchise fee and ongoing royalties based on sales or profits. Franchising provides the franchisee with a ready-made business model, including access to marketing support, training, and sometimes supply chains. This lowers the risk compared to starting an independent business from scratch. For the franchisor, franchising allows for rapid expansion and increased market presence without the need for additional capital or direct management. Overall, a franchise is a mutually beneficial relationship, giving franchisees a pathway to business ownership with proven success strategies and the franchisor an extended reach in the marketplace.
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