In the globalized society in which we live, it is increasingly common to hear about franchises, many small businessmen, when they decide to open a business, they bet on franchises, sure that a company in franchise It already has some advantages that a new company does not yet have. But what is actually a franchise and what are its advantages and disadvantages compared to other types of companies?
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Many companies already have a long history, advertising and fixed customers, and therefore offer certain guarantees of success, which a new company would take time to achieve. The franchise is an agreement between the franchisor (or business owner) and the franchisee (or new entrepreneur) by which the second can use the name of the company to obtain a profit, together with the name of the company are associated with a "know-how" characteristic of the company, as well as the necessary training to carry out this "know-how", in addition, throughout the life of the franchise, the franchisee can receive advice on the management of the business.
At the time of assignment, the franchisee must pay a fee for the right to use the franchise, royalties, and the training fee. The franchise usually has a temporary validity, generally for a period ranging from 5 to 30 years, and in a specific territory, although these conditions can be terminated at the wish of either party, with prior warning.
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Being a business of proven success, the franchise offers a clear advantage, and that is that it has already been proven that has a fixed clientele in similar areas and therefore offers certain guarantees to the new businessman. In addition, it has the back and the necessary training throughout the life process of the franchise, since the franchisor is the first interested in the success of the company. However, the main advantages lie in the lack of freedom to diversify the business and in the high initial investment, in addition, the benefits in the franchises, are shared with the franchisor.
A franchise can be a good business idea, but before opening one, it is important to know the environment and do a market study.
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