Franchising activities. What is a franchise - let's define it. What is franchising

Franchising, to put it simply, is the opportunity to open your own store, but with the sign of a well-known company. At the same time, they will help you find premises, select personnel, make repairs, and even ship the goods, the main thing is not to forget to pay your bills on time.

Now let's try to understand this issue in more detail.

Why do I need a franchise?

If you are thinking about starting your own business, most likely you have already started asking yourself the following questions: what is the best place to open it? What rental price is optimal for my business? Who to buy goods from? What markup should I make on it? How much should I spend on launch and how much can I earn?

And these are just a few of the questions that a novice entrepreneur still has to answer.

A smart person learns from other people's mistakes -

It is for such people that franchising was invented.

Before offering his franchise on the market, the franchisor, that is, the owner of the franchise, must first of all “fine-tune” his business system, work out all business processes and prove the effectiveness of his business. The franchisor must already have an existing “reference” enterprise, which he uses when “cloning” under the franchising system. Therefore, when buying a franchise, you are acquiring a proven and proven business model that has proven its effectiveness.

By purchasing a franchise, you will receive answers to all the questions that interest you, as well as those that you have not even thought about yet. This way you can start own business, while protecting yourself from most of the risks of a novice entrepreneur.

How much does a franchise cost?

To answer the question about the cost of a franchise, you first need to understand what makes up the total amount of investment in opening a new business. Typically these are the following positions:

You will need to pay the franchisor for this assistance. . This is a one-time payment that is paid when purchasing a franchise. Typically it ranges from 5 to 10% of total amount investment in opening. Many franchises have no lump sum fee at all! In fact, of course, there is one, since there are no altruists among franchisors. It’s just “hidden”, for example, in the form of a mandatory purchase of goods or equipment from the franchisor.

You will be required to pay for this support. These are regular, usually monthly, payments. Royalty can be fixed (for example, 15 thousand rubles monthly), or it can depend on the volume of your income or profit - in the form of a % of turnover. There are franchises that operate without royalties at all - but in this case, you will usually need to make regular purchases of goods from them.

Do not think that a franchise is a type of work for hire. Your business will remain yours, and you will manage it completely independently. The franchisor will only be able to give advice and recommendations to protect you from making wrong decisions.

Is it possible to open only a store under a franchise?

It is a common misconception that franchising is only about retail trade. Of course, franchise stores make up up to 70% of the volume of this market, but in the remaining 30% you can find a lot of interesting things.

First of all, these are, of course, establishments Catering- cafes and restaurants, coffee shops and sushi bars, burgers and sandwiches. The most famous food service franchise is. Unfortunately, it is almost impossible for an ordinary person to buy it in Russia - you need to have the broadest connections and enormous investment opportunities. But you can consider competitors' offers - for example, offers much more affordable option start a fast food business. You can easily open a restaurant KFC, and the company G.M.R. Planet of Hospitality offers a choice of franchises for connoisseurs of any cuisine - starting from traditional Russian ( ) and ending with Italian ( and Viaggio), Japanese ( Little Japan), Middle Eastern and Far Asian ( , Yamkee).

But franchising doesn’t end with catering. Are you interested or information Technology ? We are ready to offer you big choice franchises of online stores, as well as franchises related to software development and maintenance.

Do you want to provide services to the population, work in the field? Please - in our franchise catalog you will find many offers from fitness clubs, beauty salons, and hairdressers.

Love cars since childhood and have always dreamed of turning your hobby into a source of stable income? Consider offers from companies related to - styling services, taxis, car services, trade in auto parts and even car rental - you can make money from all of this!

Franchising is easy!

Thus, you can open absolutely any type of business as a franchise. You will need to pay a lump sum fee and regular royalties, and for this you will receive assistance at all stages of the opening and ongoing operation of your business. At the same time, all the income that you will receive from the work of your enterprise will remain yours, and the business will be completely under your sole management.

What is franchising? This word can be translated as “preferential entrepreneurship.” Otherwise - definite shape connections between companies establishing cooperation and interested in partnerships and further business development.

At the heart of this phenomenon is an offer from a company with famous name, which has proven itself well in the market (it is also called a “franchisor”), on the resale of rights to a popular brand. Together with them, an independent company that enters into an appropriate agreement receives technology for the production of products or services.

Franchising: explaining what it is in simple words

What does a small independent enterprise that has just begun its promotion in big business need? Help from a truly major player, which will allow you to get a place in the sun and a guarantee of development in the future. This is exactly how the phenomenon of franchising works, when a well-known company enters into an agreement with a new company, under which it provides it not only with exclusive rights to produce branded products and sell them, but also to provide services. At the same time, an enterprise that receives this kind of help from its successful brother uses his trademark.

Proof that franchising is one of the most effective tools business development are examples from the life of start-up companies that have gained fame thanks to the support of companies occupying leading positions in the market:

Thus, Subway (a well-known chain of fast food restaurants) is considered one of the most striking examples of franchising and its successful implementation. Over 40,000 establishments opened in more than 100 countries - you must agree, this is an enviable success for those companies that have received the rights to use the famous brand and consistently receive large profits from their own activities.

Another story is also related to “fast” food – this time we’ll talk about McDonald’s. There is hardly a person in Russia who has never heard of this company - thanks to active advertising, everyone knows about it. In our country, restaurants that sell world-famous fast food are located in 72 cities.

The last place on the list will be the winner of the honorable first place in the Franchise 500 rating – Jimmy John’s Sandwiches. This company opened franchising in 1993. No promotions, no complacency, and even the menu remains unchanged - just incredibly fast customer service and delicious burgers. 80% of the company's growth is the business of franchisees, who continue to open locations in new cities (there are similar establishments in such large US cities as Boston and Los Angeles).

As you can see, success is obvious - many buyers, profitable investments, development of your own enterprise under the auspices of a well-known brand.

How roles are distributed: features of mutually beneficial cooperation

So, let’s figure out once again who gives and who receives:

Franchisor – large company which grants a license or transfers rights to use a trademark, brand, certain features conducting business and providing services, etc.

A franchisee is a person who decides to open his own business, or a company that has begun its development, purchasing the rights from the franchisor and receiving assistance from him in starting a business.

Should such a company pay to use the brand, goods and services of a reputable enterprise? Of course. We are talking about a service fee or “royalty”. Contributions are calculated every month.

Now let's see who benefits from such cooperation and which side can it bring profit and growth?

What does the franchisee get?

Business promotion - a ready-made concept for doing business.

A good reputation – clients who will be ready to purchase products from a recognizable brand and use services from a well-known company.

An image that attracts the attention of buyers - along with a popular brand, a new company also receives a stable idea of the services provided by customers, future partners, etc.

Often the agreement includes discounts on product purchases as well as important supplies, such as consumables.

How much does the franchisee agree to pay?

The amounts of payments are prescribed in the agreement concluded between the parties - the transferor of the rights and the recipient. These royalties are subject to negotiation between the cooperating companies.

Another important concept that we're talking about in the contract, it becomes a franchise package (a set of rules for doing business that is transferred by a large company). This is a kind of instruction that allows you to conduct business without problems even if a beginner has no experience in this area.

In what type of business is a franchise possible?

Absolutely in any way. You should not think that such relationships are the lot of those who want to put fast food into production. On the list possible options more than 70 industries – franchising methods can be used in all these areas. This:

auto repair;
accounting;
bookstores;
boutiques;
education;
travel companies;
companies providing special equipment for rental, etc.

Franchising: what is it and what are its types?

The following types of such relationships are distinguished:

Commodity - mainly used in trade. When concluding an agreement, an entrepreneur opening his own business or a start-up company gets the opportunity to sell branded products. They also have the right to after-sales service. The contract stipulates the basic rules for using the brand, the range of products provided by the franchisor, business technology, etc.

Manufacturing - in this case, a company that has a patent for a certain method of manufacturing a particular product sells the company the right to produce and sell the product under its brand. The contract contains the following instructions: requirements for the process of creating a product, its quality, type, volume of products produced by the franchisee.

Service – this type involves the transfer of rights to provide certain services. A company that helps a newcomer to the market supplies necessary products, equipment, provides the opportunity to learn certain technologies and ways of doing business. In this case, it is mandatory to monitor the work on the part of the franchisor.

Business – not only the right to sell a particular product/service is transferred, but also a license to organize business processes. Features of business management (concept, rules for personnel training, requirements for the design of premises and form, etc.) are prescribed in the agreement concluded between the parties.

The franchisee is responsible for the company's reputation and must strive for leadership among competitors. However, he cannot have exceptional knowledge in all areas entrusted to him. That is why he has assistants - experts in technical issues who give him advice as needed. And in order to achieve success, the following conditions must be met:

Accept the requirements of the franchisor and his point of view, show him due respect and strive to win him over.
Know your rights and responsibilities.
Work directly with the franchisor.
Conduct business under any conditions.
Constantly strive for development and feel like part of the system.
Follow established norms, standards and rules.

So, in this article we looked at what franchising is, in simple words explained what his role is in the formation of a business, and gave a description of the main types of these relationships. Such instructions will be a good help for those beginning entrepreneurs who want to choose the position of a follower in order to become a leader in the market and develop their business successfully and with visible results.

Imagine that an entrepreneur learns about the existence of an interesting and profitable business, let's say about a fast food restaurant. What comes to mind when you think of a fast food restaurant? Of course, McDonald's.

Why should an entrepreneur create his own restaurant from scratch, which in any case will not withstand any competition with the American giant, when he can open his own McDonald's as a franchise?

However, he, like many, does not know what “franchise”, “franchise”, “franchise package” and other words that are familiar to the ear but not fully understood are.

We suggest you sort it out.

Find 10 differences: Franchising, Franchise, Franchise package

A franchise agreement (a sample of which can be found on the Internet for review) is the basis on which the relationship between the parties is built. The official name of the franchising agreement in Russia is agreement commercial concession. However, it can be formalized as a complex of different agreements.

In turn, a franchise is the object of a franchising agreement. These are the benefits that the franchisee acquires, that is, a business model, a brand, technology, training from the franchisor, marketing policy tools, and much more.

Beeches

Brand book is a guide to correct use brand that the franchisee purchased. This is a description of the corporate style, rules for designing points of sale and office design, these are logoed products, for example, uniforms, vehicles and packaging. Sometimes there is also a merchandising book (requirements for the assortment range and *POSm) and a logo book (use of a graphic sign).

Thanks to the business book, the franchisee knows what development strategy to pursue, pricing policy, what are the company’s standards and methods of promotion, what are the requirements for location retail outlets. In general, these are all the rules that a franchisee must comply with in order to properly conduct business processes. In essence, this is a guide to action, worked out to the smallest detail, a program of behavior in frequently encountered situations. The line of conduct that the franchisee must adhere to

* POSm - Point of Sales materials, materials designed to attract attention and promote goods directly at the point of sale. For example, logo stands, price tags, key rings, mugs, posters.

Let's talk about money

What are “lump sum” and “royalties”? A new franchisee enters into a franchise agreement and is faced with such definitions. What do they mean? How much to pay, to whom and for what?

Essentially, a lump sum fee is a fee that the franchisor charges when purchasing a franchise for the right to use everything that it provides. However, it is worth noting that quite a few companies operate without a lump sum fee, making a profit through royalties or by supplying products to franchisees.

Royalties are relevant for the franchisor if the company’s activities are not related to the sale of goods. This is a regular payment to the franchise owner, usually as a percentage of the establishment's turnover or as a fixed amount.

Companies that make a profit only by supplying products to their franchisees are most interested in their partner being successful in business, since the franchisor’s profit directly depends on the number of products sold by the franchisee.

For example, the same entrepreneur who buys a McDonald's franchise will most likely have to pay first a lump sum fee, and then pay a certain percentage from his fast food restaurant.

Direct and not very franchising

In conclusion, it is worth highlighting two main types of franchising: direct and subfranchising.

With direct franchising, the franchise owner sells it directly to the local franchisee, that is, there are no intermediaries between the parent company and the partner in a particular region.

In the case of subfranchising, a master franchise is sold exclusively to one person in a certain territory. The purchaser of a master franchise becomes a subfranchisor in that territory and has the right to sell the franchise to other franchisees.

It should be noted that the franchising market continues to grow - new franchises are appearing, well-known brands are actively developing.

Look for franchises that inspire you, carefully study the franchise package and be aware of what you are paying money for. And you can choose a suitable franchise by reading best offers from

Now let's try to understand this issue in more detail.

Why do I need a franchise?

And these are just a few of the questions that a novice entrepreneur still has to answer.

A smart person learns from other people's mistakes -

It is for such people that franchising was invented.

By purchasing a franchise, you will receive answers to all the questions that interest you, as well as those that you have not even thought about yet. This way, you can start your own business, while protecting yourself from most of the risks of a novice entrepreneur.

How much does a franchise cost?

To answer the question about the cost of a franchise, you first need to understand what makes up the total amount of investment in opening a new business. Typically these are the following positions:

You will need to pay the franchisor for this assistance. . This is a one-time payment that is paid when purchasing a franchise. Typically it ranges from 5 to 10% of the total investment in the opening. Many franchises have no lump sum fee at all! In fact, of course, there is one, since there are no altruists among franchisors. It’s just “hidden”, for example, in the form of a mandatory purchase of goods or equipment from the franchisor.

Is it possible to open only a store under a franchise?

It is a common misconception that franchising is only focused on retail. Of course, franchise stores make up up to 70% of the volume of this market, but in the remaining 30% you can find a lot of interesting things.

First of all, these are, of course, catering establishments - cafes and restaurants, coffee shops and sushi bars, burgers and sandwiches. The most famous food service franchise is. Unfortunately, it is almost impossible for an ordinary person to buy it in Russia - you need to have the broadest connections and enormous investment opportunities. But you may want to consider what competitors offer - for example, it offers a much more affordable option to start a fast food business. You can easily open a restaurant KFC, and the company G.M.R. Planet of Hospitality offers a choice of franchises for connoisseurs of any cuisine - starting from traditional Russian ( ) and ending with Italian ( and Viaggio), Japanese ( Little Japan), Middle Eastern and Far Asian ( , Yamkee).

But franchising doesn’t end with catering. Are you interested or information Technology? We are ready to offer you a large selection of online store franchises, as well as franchises related to software development and maintenance.

Do you want to provide services to the population, work in the field? Please - in our franchise catalog you will find many offers from fitness clubs, beauty salons, and hairdressers.

Franchising is easy!

Beginning entrepreneurs sometimes do not know or do not fully understand some of the terms that are used in business. The subject of frequently arising questions is related concepts such as franchising and franchising, and determining the difference between them.

The growing popularity of this form of business organization, such as franchising, requires a careful study of all its features. What are the advantages of this system, are there any disadvantages and why is it profitable to use a franchise in the small business sector?

Definition of concepts and their differences

Franchise is translated from French as a benefit and means a certain set of documents and rights to use elements of a business. Such elements could be:

know-how and technology;
business methods;
trademarks, brands, logos;
brands;
business models;
software, etc.

In essence, this is a “rent” of a certain brand or trademark, the acquisition of the right to use all its developments, technologies, and reputation in order to obtain one’s own benefit in the form of profit. Franchising is the process of buying a franchise, a certain agreement between the parties to the contract. Simply put, a franchise is an object of franchising. The parties to this agreement are the franchisor and the franchisee. The first is the one who sells the franchise, the second is the one who buys it.

The contract also stipulates payment of the cost of the franchise. It comes in two forms:

lump sum payment – one-time payment of the cost of the franchise;
royalty - payment of a percentage of the profit received in the process of using a franchise or payment of a fixed payment for a certain period.

A businessman assumes certain obligations:

produce products in compliance with the requirements for their quality and applied technologies;
carry out activities in a strictly established place according to the intended scheme;
use the franchisor's trademark.

What is a franchise business? An expert in the field gives the answer in the video.

History of origin

The history of franchising takes its toll began more than a century and a half ago, in 1851. Its founder is considered to be the owner of a large company that produces Sewing machines— Isaac Singer. It was he who first began to sell independent companies the right to sell, service and repair their products throughout the United States. Thus, Singer not only distributed his product to large territory without any effort, but also provided after-sales service.

The next company is General Motors. Its dealers sold cars only from this company. Due to the fact that they made a financial contribution to the business, dealers were interested in maintaining the reputation of General Motors and provided quality service when selling its products.

After a successful start, franchising quickly spread to other large companies. Manufacturers of popular drinks "Coca-Cola" and "Pepsi" they approached it this way: they produced syrup at the main plant, then distributed it to franchisee factories, where the drink acquired the final product form and then went on store shelves.

Since the beginning of the 20th century, large manufacturers began to create and sell their goods to franchisees for their subsequent sale. The seller provided small sellers with discounts and the opportunity to use the brand. This method of selling goods exists in modern conditions.

After this (30s of the 20th century), franchising spread to the oil industry, namely: gas stations began to be rented out to small local entrepreneurs.

In 1945, confectioner-businessmen Baskin and Robbins began selling some of the new cafes of their rapidly growing chain under the terms of using their trademark to outside entrepreneurs. The McDonald brothers have achieved great success in franchising. Their fast food restaurants, which opened in the 50s. last century, are still very popular and number more than 30 thousand establishments all over the world.

IN this momentfranchising is one of the most popular and progressive forms of doing business and is widespread both in the West and in Russia.

Advantages

Doing business through franchising has both positive sides, and negative. This system is most suitable for beginning entrepreneurs who are planning to open their own business, but are not confident in their abilities. A franchise provides an opportunity to get your own ready-made business, manage it and gain experience in the business field. In addition, there are the following benefits of franchising.

Recognition brand. By purchasing a franchise, you are essentially buying ready business, which customers know, recognize and often love. There is no need to spend money on marketing, advertising, technological or design developments.

Minimum risks. The likelihood of a large company collapsing is much lower than that of a new, unknown enterprise.

Feeling support. Franchisors are interested in maintaining and improving the image of their company, and therefore usually provide assistance to subsidiaries. Consultations, advice on doing business, training in proper management decisions– this is not the entire list of information services that a franchisee can receive.

You can choose industry you are interested in and study its performance indicators before starting your own business. Before you spend your money, you will know exactly how quickly your investment will pay off and how in demand the products will be on the market.

Low level of competition. Each franchisee receives his own territory in which he will conduct and develop the business. There will definitely be no competitors in this territory who could have the same franchise.

Flaws

You cannot use your ideas or innovations to run a business and must follow a strictly prescribed pattern. This kind of business is ruining fresh ideas and prevents the enterprise from developing in a new direction.

Enough high price franchises. To purchase it you will need considerable funds, and it is not known when they will pay off.

Inflexible selection system suppliers. Often franchisees are forced to purchase raw materials from those suppliers appointed by the franchisor. The terms of such transactions are not always favorable.

Narrow scope of activity. By purchasing a franchise and everything that comes with it (brand, trademark etc.), you also undertake to run your business in the direction indicated by the franchisor, without the right to change anything.

Failure to comply with such strict requirements can result in hefty fines or even loss of franchise.

The risks are that The parent company may still go bankrupt. Or draw up a franchise agreement in such a way that you will not receive any benefit from this transaction. So you need to approach the conclusion of an agreement especially carefully, involve experienced and competent lawyers in the case and carefully study the terms.

Franchising agreement - what is it?

IN Russian legislation franchising is name of the commercial concession. This term is fully consistent in its meaning with franchising and their definitions are identical. Such an agreement consists of several points:

The subject of the agreement is, in fact, those rights and benefits that are sold to the franchisor.
Parties to the contract (copyright holder - business owner, user - franchise buyer).
The form of the agreement (must be written, registration with the relevant service is also required).
Remuneration (royalty) – its amount and method of deduction.
Rights and obligations of the parties (both copyright holder and user).
Limitations on the rights of the parties.
Contract time.
Changing the contract (in what cases can its terms be changed).
Termination of the contract (at the end of the term or at the request of one of the parties).
Liability (penalties and fines for violation of contract terms).

Examples of franchising

For better clarity, you can consider examples of successful franchise sales large companies for individual industries.

One of the most prominent representatives of franchising at the global level is the company. Ray Kroc's idea to sell company franchises in all American cities has led to the fact that the restaurant chain currently covers more than 30,000 establishments, and its owner has become a billionaire. Now almost every country in the world has at least one McDonald's restaurant, and quite high requirements are imposed on those wishing to purchase a franchise.

Another well-known example of success is the franchising company, one of McDonald's main competitors. It uses the same scheme - selling rights to a brand, product, trademark and providing full instructions on doing business.

Among automobile companies the most prominent representatives- mentioned General Motors and Ford, which use a franchised dealership system to distribute their vehicles to customers.

The clothing chain invests its funds not in advertising or marketing, but in opening new sales points. Thanks to this, the network has 1.5 thousand stores and the brand is recognizable in many countries around the world.

Franchising, despite the presence of certain disadvantages, is an effective form of business organization, especially in entry level, for entrepreneurs without much work experience or innovative schemes. Such a system allows you to reduce risks, get a recognizable brand and save a lot of effort and money on business promotion.