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- DictionaryFran·chise/ˈfranˌ(t)SHīz/
noun
- 1. an authorization granted by a government or company to an individual or group enabling them to carry out specified commercial activities, e.g., providing a broadcasting service or acting as an agent for a company's products: "Toyota granted the group a franchise"
- 2. the right to vote: "the franchise was limited to Estonian citizens"
verb
- 1. grant a franchise to (an individual or group): "a franchised dealer"
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Learn the origin, synonyms, examples, and legal implications of the word franchise, which can mean the right to vote, the right to market a company's goods or services, or a special privilege granted by the government. See also related words and articles on franchise.
- What Is A Franchise?
- Understanding Franchises
- Franchise Basics and Regulations
- Advantages and Disadvantages of Franchises
- Franchise vs. Startup
- The Bottom Line
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A franchise is a type of license that grants a franchisee access to a franchisor's proprietary business knowledge, processes, and trademarks, thus allowing the franchisee to sell a product or service under the franchisor's business name. In exchange for acquiring a franchise, the franchisee usually pays the franchisor an initial start-up fee and an...
When a business wants to increase its market share or geographical reach at a low cost, it may franchise its product and brand name. A franchise is a joint venture between a franchisor and a franchisee. The franchisor is the original business. It sells the right to use its name and idea. The franchisee buys this right to sell the franchisor's goods...
Franchise contracts are complex and vary for each franchisor. Typically, a franchise agreement includes three categories of payment to the franchisor. First, the franchisee must purchase the controlled rights, or trademark, from the franchisor in the form of an upfront fee. Second, the franchisor often receives payment for providing training, equip...
Advantages
There are many advantages to investing in a franchise, and also drawbacks. Widely recognized benefits include a ready-made business formula to follow. A franchise comes with market-tested products and services, and in many cases established brand recognition. If you're a McDonald's franchisee, decisions about what products to sell, how to layout your store, or even how to design your employee uniforms have already been made. Some franchisors offer training and financial planning, or lists of...
Disadvantages
Disadvantages include heavy start-up costs as well as ongoing royalty costs. To take the McDonald’s example further, the estimated total amount of money it costs to start a McDonald’s franchise ranges from $1.3 million to $2.3 million, on top of needing liquid capital of $500,000. By definition, franchises have ongoing fees that must be paid to the franchisor in the form of a percentage of sales or revenue. This percentage can range between 4.6% and 12.5%, depending on the industry. For upris...
If you don't want to run a business based on someone else's idea, you can start your own. But starting your own company is risky, though it offers rewards both monetary and personal. When you start your own business, you're on your own. Much is unknown. "Will my product sell?", "Will customers like what I have to offer?", "Will I make enough money ...
A franchise can be a great way for an individual to enter the world of entrepreneurship, as the majority of the groundwork has already been laid and you are leveraging off an established, successful, and well-known business and brand name. There are also many businesses with franchises to choose from. For a fee and start-up costs, you can be on you...
A franchise is a license that allows a franchisee to sell a product or service under a franchisor's name and brand. Learn about the advantages, disadvantages, and regulations of franchising, and see examples of popular franchises in different industries.
Franchising is a method of distributing products or services involving a franchisor and a franchisee. Learn about the types, benefits, challenges and legal aspects of franchising from Franchise.org, the leading resource for franchise information.
Learn the meaning of franchise in business, politics and films with Cambridge Dictionary. Find out how to use franchise as a noun or a verb, and see examples of franchise in sentences.
Franchise definition: a privilege of a public nature conferred on an individual, group, or company by a government. See examples of FRANCHISE used in a sentence.
Nov 7, 2023 · A franchise is a business arrangement where one party, the franchisor, grants another party, the franchisee, the rights to use its brand, business model, and support structure in exchange for a fee. Learn about the basics, regulations, types, and advantages and disadvantages of franchising.
A franchise is an agreement between a franchisor and a franchisee that allows the latter to use the former's business model, brand name, and intellectual property. Learn about the advantages, disadvantages, and regulations of franchising, and see real-world examples of popular franchises.
