Franchise Concept

Franchise concept

Franchising is a business model in which many different owners share a single brand name. A parent company allows entrepreneurs to use the company's strategies and trademarks; in exchange, the franchisee pays an initial fee and royalties based on revenues. The parent company also supports the franchisee, including advertising and training, as part of the franchising agreement.

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Franchising is a faster, cheaper form of expansion than adding company-owned stores because it costs the parent company much less when new stores are owned and operated by a third party. On the flip side, the potential for revenue growth is more limited because the parent company will only earn a percentage of the earnings from each new store. 70 different industries use the franchising business model, and according to the International Franchising Association the sector earns more than $1.5 trillion in revenues each year

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source: Franchise concept