What is franchising?

Franchising is an opportunity to make an effective business idea available to several partners so that that type of business might be multiplied. It is the franchisor who develops and tests out the business concept.

Franchisees implement the business idea as independent operators in their own sales area and benefit from the franchisor’s experience and the advantages of the system. For this the franchisee pays the franchisor a fee upon entering the franchise agreement – the amount dependent on the popularity of the brand and how developed the franchise system is. In addition, the franchisor undertakes give the franchisee regular support and to continue to develop the system and the necessary provision of services. The franchisee undertakes to conform to the business concept and recognize that he/she has responsibility for the whole system and thus for other franchisees.

The basis of franchising is a partnership of independent entrepreneurs who have a common aim – that is, to turn the successful philosophy into a profitable business.

Franchising is therefore a partnership aimed at mutual and long-term commercial success. The only criterion for the franchisor is that the franchisee is effective! If the franchisee is successful the franchisor will be, too! This is why the franchisor must give the franchisee as much support as is humanly possible in order that they may achieve their common goal. The franchisor is the service provider for the franchisee and assumes shared responsibility for their success.