What are the Concepts Related to the Franchise | Golden Franchise

24 March 2019by novaab

Even if the franchisor and buyer seem to be simply two parties, they are named differently according to their authority and the work they undertake.

Franchisor (Franchisor, Franchiser): It is the person or organization that owns the rights of the system and the brand and grants these rights to third investors with the franchise agreement. The franchisor may be the one who set up the system, or someone else who is only authorized to sell the franchise rights. The franchisor may or may not have their own business or businesses operating on the same system. The franchisor, research, training, audit, etc. as required by the system. It undertake supports such as.

Franchisee: It is an independent investor who implements the rights of the system and the brand for a specific sales-service point and / or region by taking an agreement.

Zone franchisee (Area franchisee): The franchisor transfers certain obligations and rights of the market to the regional franchisee in a certain geographical area. In some systems that receive a regional franchise, sub-franchisees can open businesses, in some systems only themselves can open businesses. The region franchisee, according to the requirements of the system, as if a franchisor, the selection of the sub-franchisee, the choice of business location, training, inspection, supply of goods, etc. can take on one or more of such functions.

Sub-franchisee (Sub franchisee): The person or company whose right to use the system and the brand is given by the region franchisee by agreement. In some systems, the agreement is made directly between the region franchisor and the sub-franchisee, while in some systems the franchisor himself becomes a party to the agreement.

Master franchisee (Master franchisee): A system developed abroad and a person or institution that acquires the rights to use the brand in a certain country. Sometimes only the masterfranchise area is allowed to open a business, often under the franchise. While the franchises given in some systems are connected to the masterfranchise area, some of them are directly connected to the center abroad.

System (Franchise system): It defines the whole of the rules and duties within the scope of the franchise relationship. Subjects such as the location, establishment, operating procedures, sales techniques, use of brands, training of personnel, supervision of the enterprise, selection of franchisees, franchise agreement are determined.

Business (Outlet, Store): It defines the physical environment used for the retail business. They are structures such as shops, shops, restaurants, hotels, offices, warehouses, which are generally used in the sale of products or services. In the case of products or services (eg cleaning, nursing, web services, etc.) that are sold on-site or sent by mail / internet by ordering by phone or internet, home, shared office, computer, internet, warehouse, etc. are the elements that make up the business.

Franchise entry fee (Royality, Lumb Sum Fee): It is the price that the franchisee initially pays the franchisee to enter the system.

Franchise usage fee (Franchise Fee): In most systems, it is the price that the franchisee pays to the franchisee for using the system and the brand during the operation. Generally, the monthly and sometimes weekly fee can be a certain ratio of the turnover or profit, or it can be taken according to other sizes, for example, the business area or the number of service units. A base limit can be set for the usage fee, as well as a monthly fixed payment.

Advertising Fund (Advertising Fee): In most systems, a fund is established for collective advertising expenditures made from the center and the contribution fee is collected from the enterprises. This cost is generally defined in proportion to the turnover.

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