DEFINITION OF FRANCHISE

It is a business arrangement where the owner (Franchisor) of an already established trade mark, trade name or copyright has given others (a buyer , Franchisee) the license to operate under their organization.

DEFINITION OF FRANCHISE CONTD.

Franchise is a process that occurs when the franchisor licenses its trade name (the brand, such as Merry Maids or Burger King) and its operating methods (its system of doing business) to a person or group (the franchisee), who in turn agrees to operate according to the terms of the contract (the franchise agreement).

cite:  McCrea, Bridget. "Affordable Franchises." Black Enterprise 32.2 (2001): 88. Academic Search Complete. Web. 8 Nov. 2012.

FRANCHISEE AND FRANCHISOR

Franchisee is a  individual or a group of people who acquire  a license to run the Franchise  as a small business but at the same time a dependent on the Franchisor.

Franchisor is the owner and seller of a franchise who give other people license to operate with his trade name to promote his company and make more profit.

CHARACTERISTICS OF FRANCHISE

v  Franchises have similar logos, designs and facilities.

v  The same company name.

v  Different owners but each operate their own outlet as a small business and remain connected to the original business owner (Franchisor).

ADVANTAGES OF FRANCHISING

v  Training and guidance: The franchisor usually provides the franchisee with training and guidance on how to run the business. They stand a better a chance as to other small business owners who might experience failure due to inexperience.

v   Brand name Appeal: People tend to patronize well known brands than newer ones. The franchisee therefore enjoys patronage of an already established brand name.

v   Financial Assistance: The franchisee gets financial assistance from the franchisor if needed. As it important for small business owners to raise funds for there business, the franchisor helps them financially especially when the business is new.