What Is Franchising?

　　 Franchise It is a special kind. business model 。 Franchising started in China in the 90s of last century, and has been developing rapidly since the very beginning. At present, the national franchise mode is widely distributed in 60 industries. The number of franchising enterprises is close to 2000, and the franchised stores are nearly 82 thousand. The market is increasing at an annual rate of about 49%.

Franchising is Chain operation One of them. Chain operation refers to the business point of running similar commodities or services, centralized management and division of labor under the Unified overall planning and layout, and higher benefits can be achieved by expanding the scale. Chain operations include direct chain operation, franchising and free chain. Measures for the administration of commercial franchising It is stipulated in the second provision: the franchise business referred to in these Measures refers to the business resources that the franchisor will have the right to grant others to use, such as trademarks, trade names, business models, etc., and shall be granted to the franchisee through signing the contract. The franchisee shall engage in business activities under the unified management system according to the contract and pay the franchise fee to the franchisor.

According to this provision, franchising as a special mode of operation is characterized by the franchisee's assignment of its franchise, trade name and business mode through the contract. The franchisee who has obtained the franchise is operating in accordance with the contract under the unified operation system and pays the franchise fee to the franchisor. The basis of cooperation between the two sides is the franchisee's intellectual property and business mode, as well as the capital invested by the franchisee. Franchisees usually master the franchisee's final management rights through contracts, and the franchisee has ownership of their investments. Each side gains revenue through cooperation.

It is worth noting that there is no affiliation between franchisees and franchisees in franchising. Neither side is a parent company, nor a partner, nor an agent. Specifically, the franchisor has authorized the franchisee to make use of his trademark logo and management technology and other intellectual property rights, so that he can operate on a unified business image and management mode. For all franchisees, there is no direct relationship between them.