What is Franchising?

Franchising is about working cooperatively together a way to learn as a team and grow partners Franchiseehips. s and Franchisors are 'joined at the hip' so to speak. The more they can do things together and the better they communicate the stronger their voice and the better they prosper.

A new franchise opens every eight minutes somewhere in America - testament to the success of franchising which is predicted to account for 50% of all retail sales worldwide in the near future, making it a vital economic force and one of the dominant organisational forms of our times.

There is no doubt that franchising is gaining popularity throughout the world, emerging as an effective way to conduct and grow successful businesses. The beauty of the franchise system lies in its flexibility and adaptability to suit every continent, product or service, every lifestyle and any socioeconomic situation.

Besides franchising's role of providing opportunities for entrepreneurs to be "job creators" and not "job seekers", it also makes a major contribution to the development of skills. The transfer of skills to the emerging entrepreneur in particular is central to the success of franchising as an economic stimulant.

Two most Familiar Franchising Options:

1. Product and Trade Name Franchising

The sales relationship between the supplier and the dealer in which the dealer is granted the right to sell his products in exchange for fees and royalties as well as an obligation to sell only the franchisors product. This type of franchising is dominated by the petrol service stations, car dealerships and cool-drink bottles.

2. Business Format Franchising

This concept is what true franchising is all about. It is characterised by an on-going relationship between the franchisor and the franchisee and includes not only the product, service and trademark, but enables the franchisee to acquire the right to use the franchisors entire business concept. This includes the franchisors name, goodwill, products and services, marketing procedures, administrative and operative systems and support facilities.

By the very definition, business format franchising is a blueprint to business success. For this to happen, however, franchising must be conducted in accordance with a series of well-defined guidelines and this is where Team Maddison has a critical role to play.