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1、Important Facts About Franchising What is the history of franchising? Is franchising right for you? What kinds of franchises are there? What can a franchise do for me that I cannot for myself? How much profit will I make? How do I investigate the franchisor? How do I know if I can afford it? Will th
2、e franchise help me finance? Where can I find additional sources of available capital?What is the history of franchising?How did it all start? Few people really know the exact answer. According to definition, the word franchise comes from old French, meaning privilege or freedom. Some say franchisin
3、g began with an effort to collect taxes, as governments would select certain people to gather fees within a given geographical area. These collectors as they were called, kept a sizeable portion of the monies collected and remit the balance to the Pope. Other historians say franchising started with
4、a privilege bestowed by the local sovereign - or lord - giving merchants the right to hold fairs, market their wares, trade, run local ferries or hunt on their lands. Essentially, this was an endorsement of a monopoly on commercial ventures. This common practice was perpetuated throughout the Middle
5、 Ages, and eventually became part of European Common Law.Franchising continued its evolution in the economies of the world. The most sited example occurred in Germany in the 1840s when major ale brewers granted exclusive rights to certain taverns to sell their brew. In 1851, the Singer sewing machin
6、e company granted limited distributorships for their famous sewing machines. The language, format and contractual agreements utilized in that early franchise document (i.e., Prospectus or United Offering Circular) are still utilized today.Around the turn of the century, the face of franchising looke
7、d very much the same; it essentially granted the right to distribute and sell a product. At this time, the trend-setting model was the franchising rights authored by oil refineries and automobile companies. After WWII, millions of servicemen and women returned home, and with that - the Baby Boom beg
8、an. The large work force demanded the opportunity to explore and develop more and better business opportunities, which changed the business and our economy forever. With these demands, franchising evolved into the dominant and most successful concept - business format franchising. In this type of fr
9、anchising, the franchisor (example: McDonalds) not only allows the franchise to use its name and sell its products or services, but also involves the total transfer of a way of doing business. This includes marketing, operating, technical training, management techniques and expertise developed and p
10、erfected by the franchisor (sometimes referred to as a learning curve). The franchisor will also provide on-going training and support throughout the life of the franchise agreement.A rapid growth in the 60s and 70s presented a perfect opportunity for the franchise concept to grow and flourish. At t
11、he same time however, franchising experienced some harsh growing pains. Along with the honest and solid franchisors, emerged the unscrupulous and fraudulent; misappropriating the licensing fees and literally running out of town. Others were undercapitalized and faltered in their concept, leaving in
12、their wake- the franchisees. Still, other franchisors had been careless in selecting the right franchise and thus, partnered themselves with erroneous individuals and misrepresented their company.In spite of all of the hardships and stumbling blocks, franchising has emerged triumphant, as it remains
13、 as the most clear and viable business concept. Franchising, or more specifically, business format franchising, affords entrepreneurs interested in self-employment a strategic partnership or relationship that is governed by a contract or franchise agreement for a defined period of time. When you pur
14、chase a franchise you are investing a proven and refined system that should have a brand name, successful operating system and a history of quality service and success. The common goal for the franchisor and the franchisee is to dominate a particular market and keep customers coming back for more. A
15、ll members (franchisees) of a particular franchise system share the responsibility of maintaining high standards of quality, consistency, convenience and other factors that contribute to the success of building a dominant brand, loyal customers and repeat business for everyone.The ultimate success o
16、f the franchisee (individual franchise unit owner) is based on the proven success of the franchisor. If the franchisor offers an established product or service with a well-recognized brand name, a history of success with company units and existing franchises, is well financed and motivated, your chances of success are very high. And, although franchising is now a very highly regulated industry, it is important that you ask the right
