The franchise business model is totally based on the relationship between two sides: the franchisor and the franchisee. The franchisor is the person or company that owns the rights to a brand trademark. The franchisee is the one that pays a fee in order to use the franchisor’s trade name and operating systems. This relationship is built on mutual understanding and support. The franchise business model is usually the business model chosen by those who want to start a new business, but do not have much idea how to begin it. That is because the franchising system allows you to acquire a ready-made business, with a consolidated brand and know-how already tested.
There are two types of franchise business models. They are:
Product distribution franchise
In this model, the franchisor is also the manufacturer of the product, which will be sold by the franchisee. It is similar to a supplier-dealer system, however, with the difference that the franchisee must sell that brand exclusively, and cannot resell others simultaneously. For example, John Deere and Ford Motors.
Business Format Franchise
This is the most recurring business model franchise. In addition to using the franchisor’s trade name and brand, the franchisee has access to marketing and sales strategies, distribution and operations systems, as well as training and support. Some examples include Dunkin Donuts and McDonald’s.
The franchising process varies depending on the type of franchise arrangement, state, and franchisor guidelines. That said, a typical franchising process will look something like this:
Step 1: Gather background information
First things first, conduct research to identify the type of franchise you would like to venture into. Make sure you have a clear idea of what you expect to gain from starting a franchise. Next, come up with a list of franchisors you'd be interested in investing in. Prioritize selecting businesses that match your goals, budget, and business acumen. Also, make sure you research the legal considerations involved with a particular industry or jurisdiction for starting a franchise in your state.
Step 2: Reach out to the franchisor
Contact the franchisor's representative and schedule a meeting. A face-to-face meeting is an opportunity for you to know more about the business and help you make an informed decision. Key questions to consider include inquiring about how long the business has been in operation, its growth plan, and risk factors. After the interview, the franchisor should offer you their franchising brochures, guidelines, and other relevant initial documentation for potential franchisees.
Step 3: Negotiations
Assuming initial conversations go well and the franchisor meets your key criteria, it's time to negotiate the terms of the partnership. This stage is often quite complicated, so you need to equip yourself with the best negotiation skills and strategies.
Step 4: Agreement Signing
Once the terms on the table are accepted, the next step forward is signing a formal agreement. At this stage, consider hiring a legal expert to guide you. Also, take some time to review the agreement to ensure that it's as clear and detailed as possible to avoid confusion and potential disputes down the road.
With our Panel of Experts who comes from various Industries, you can make the right choice to select the International Brand you wish to choose to start your own business as a Franchisee. We offer complete support in helping you indentifying, making the right choice and also a complete step up step support in acquiring the Franchise. You can make your choice from any of the following:
This list is endless, we have more than 340 Experts on our Business Panel who wish to give out their Franchise to someone who understands business and knows how to make money using the brand.
Steps to Follow:
At the end of this page is a button which will help you connect with us and share your interest. Based on which we shall invite the short-listed Business owners, experts for an Online Meeting. During this meeting we shall discuss in detail the steps to move forward and design a complete thorough roadmap.
Once the final agreements have been designed and signed with mutual understanding, the Franchisee shall pay the Franchisor the Franchisee Fee directly into their accounts and also help them in getting the required paper work completed so that they can visit the location and establish the complete set-up required and also conduct the necessary training program to initiate the work process.
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