Other than the many types of businesses that an individual can start with a franchise, there is another system of classification which is meant to describe a given type of franchise opportunity. Before getting involved in franchise business, it is important to understand these classifications. The first of these is area franchising, which is basically an areas of operation that a franchisee is allowed to operate on.
This is a type of franchise agreement that is mainly given to companies or even individual persons especially those who have been successful in managing franchises in the past. The franchisee will be given a territory where he or she is expected to develop. The franchiser and the franchisee get to agree on the number of units that will have been developed by the end of a particular period.
In the case that the franchisee cannot develop the number of units as agreed with the franchiser, they risk their licenses being revoked. In addition to revoking the license, the franchisee could also be fined. The territory in question can vary and this depends on the agreement and also the type of business that is to be opened. There are cases where the area can be as big as a state, or even just a small part of the city.
When it comes to licensing, the franchiser may offer special rates. There could also be continuous to be paid on the region where the franchise has been developed. It is illegal for a franchisee to operate on areas outside of his or her territory. However, by purchasing a new franchising license, they can operate on such areas.
In the case where a franchisee was successful in operating a single unit, he or she may be offered multiple units by the franchiser. Normally the franchisee will be given discounts in terms of licensing fees, so that he or she may start several other locations.
To get the go ahead to operate multi-unit franchises, one must not have operated a single unit type by the same franchiser. If you can demonstrate that you have past experiences in these ventures even with other franchisers, you could be granted the opportunity. It is open for anyone who has the ability and determination.
When defining franchise areas, there are two important things that are considered. They are the population and the geographical size. Thus, depending on these two factors, the size could be as small as a part of the city, or big like an entire state.
There are several more ways of defining an area franchising. For instance, the media definition explains it as the extent where a business may advertise or generate business. There is also something known as master franchise. This gives the franchisee the first rights should there be a need for expansion or a bigger territory. These are the types of franchises that you ought to know about.
This is a type of franchise agreement that is mainly given to companies or even individual persons especially those who have been successful in managing franchises in the past. The franchisee will be given a territory where he or she is expected to develop. The franchiser and the franchisee get to agree on the number of units that will have been developed by the end of a particular period.
In the case that the franchisee cannot develop the number of units as agreed with the franchiser, they risk their licenses being revoked. In addition to revoking the license, the franchisee could also be fined. The territory in question can vary and this depends on the agreement and also the type of business that is to be opened. There are cases where the area can be as big as a state, or even just a small part of the city.
When it comes to licensing, the franchiser may offer special rates. There could also be continuous to be paid on the region where the franchise has been developed. It is illegal for a franchisee to operate on areas outside of his or her territory. However, by purchasing a new franchising license, they can operate on such areas.
In the case where a franchisee was successful in operating a single unit, he or she may be offered multiple units by the franchiser. Normally the franchisee will be given discounts in terms of licensing fees, so that he or she may start several other locations.
To get the go ahead to operate multi-unit franchises, one must not have operated a single unit type by the same franchiser. If you can demonstrate that you have past experiences in these ventures even with other franchisers, you could be granted the opportunity. It is open for anyone who has the ability and determination.
When defining franchise areas, there are two important things that are considered. They are the population and the geographical size. Thus, depending on these two factors, the size could be as small as a part of the city, or big like an entire state.
There are several more ways of defining an area franchising. For instance, the media definition explains it as the extent where a business may advertise or generate business. There is also something known as master franchise. This gives the franchisee the first rights should there be a need for expansion or a bigger territory. These are the types of franchises that you ought to know about.
No comments:
Post a Comment