What is Franchising?

Franchising is a method or way of distributing goods and services. There are a number of different types of franchising. The type that developed early on was the product franchise wherein a manufacturer granted a franchisee the right to sell it's products, i.e. car dealerships and service stations. Another type of franchise that developed in the U.S. was the name and process franchise. This format allows the franchisee to use a special process, or recipe and to use the franchiser's name.

Another type of franchising not only grants the right to use the name and sell the products or services of the franchiser but it also involves the transfer of the total way of doing business that has been developed by the franchiser. Specifically the franchiser transfers all its operating systems, technical expertise, marketing systems, training systems, management methods and essentially all relevant information, to the new franchisee. The franchiser also trains the new franchisee extensively up front and provides ongoing training and support throughout the life of the franchise agreement.

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