The Concept of Franchise!

Mar 27 2025 Business Add To Wishlist

a) Definition of the Franchise

The assignment of the franchise means that the owner of a business permits other people to launch a business with the same name and specifications, work and service methods, earn money from it, and in return, s/he (the owner of a business) receives a fee for the franchise.

b) The Franchise Fee

There are several ways to get the franchise fee:

The first way:

is to get the franchise at the beginning and in full.

The second way:

is to take the franchise as a withdrawal from the sale over time.

The third way:

is a combination of the first and second methods. That is, an amount of money is received at the beginning of the work and a certain amount is also received on a monthly or weekly basis - by agreement - from the sale.

c) Ownership of the Franchise and Chain Stores

"Franchise is another model of chain stores that enjoy the same management and ownership"

 

1. To increase the profits and develop the business, chain stores usually decide to maintain the same type of stores, only with the difference that the management of each store is left to someone else. This method is literally called the ownership-management; that is, the store manager is also its owner.
2. The difference between the ownership of the franchise and a chain store is that each chain store has a manager who is paid and has no direct ownership or interest in managing the store. However, in the franchise ownership, the store manager owns the store. The McDonald's owner, for instance, authorizes a person who asks for launching a fast food shop to operate under the McDonald's name and, in return, pay for the McDonald's brand.
3. You cannot rent a brand and work on your own term – you must adhere to the brand’s rules and mode of operations! When you are given the right to use a brand, you are required to act by the rules of the person who owns the business franchise.
4. The reason for the growth of the franchise ownership is that when the customers visit a branch of a store with a specific brand, such as McDonald's, they expect to receive the same services that are provided in other branches. With this, irrespective of the branch of the brand a customer enters, s/he gets the same service and treatment.