What Is a Franchisor? A Clear Perspective

November 27, 2012 Facebook Twitter LinkedIn Google+ Business Advertising,New Business

What Is a Franchisor? A Clear Perspective

by Qiana John

For all those of you who are new to the field of franchising, you would want to understand the terminology related to the What Is a Franchisor? field. When we are talking about franchises and franchising, it is essential to understand more about the people who are involved at both the ends. There is the franchisor and the franchisee in a franchising relationship. Our main focus here is to understand what is a franchisor?

A franchisor is a company which allows the franchisee to run a business that is similar in all respect to theirs. It is the franchisor who is the owner of the company, the trademarks that come with the business and also the products too. He gives the rights to the franchisee to sell his products under the same brand name at the franchisee’s place of convenience. All these transactions are made for a certain amount of initial startup fee that the franchisor charges from the franchisee. Therefore, before a prospective franchisee gets into an agreement with the franchisor it is essential that he learns about the franchise cost.

There are different types of franchises that are available in the market. There are a few which call for exorbitant initial costs and there are a few others that come in at affordable prices. The franchise cost also may depend upon the kind of success the business has achieved. A very well established company would obviously quote a huge price to share its trademark, strategies and brand name. Therefore, having an idea about the franchise cost would definitely help in making the final decision.

Fine, coming back to what is a franchisor; we will learn that he is the utmost authority and a perfect blend of an entrepreneur and a business visionary. He has envisaged that a particular business has great profit potential and has started off with it to reach such a stage that he is franchising it out to other people as well who hail from different locations. By franchising, the franchisor gets a huge amount when the franchisee buys the franchise from him, and he will also ask for a certain percentage of commission in the profits that are made by the franchisee. This way, he is generating a steady stream of secondary income too.

Prospective franchisees would definitely want to put their money on those franchises that have carved a niche for themselves. A franchisor therefore would recruit new franchisees that exhibit great signs of success in the future with their knack and intelligence. However, the franchisor is responsible for providing ongoing support in the technical and management departments.

Qiana John is Canadian Author. He provides created to help prospective franchisees get smarter about franchise selection. He has applied his knowledge and understanding to a wide variety of what is a franchisor and franchise cost.

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