Franchising is often defined as a system of cooperation and business relations between independent enterprises affiliated with a franchise agreement. Franchising occurs when a company - owner of the products and services (the franchisor) provides the ability to a specific person or group (the franchisee) to distribute its products or services, using his name and character, as well as the operating system, and the franchisee agrees to do business under strictly defined conditions.

Franchisor conveys its already proven system of business, brand, manuals, equipment, training, experience, and support services. Franchisor has some control over the franchisee’s business. In return, the franchisee pays the franchisor of the initial fee and a fee for use of the trade name and business methods.

The form of business that offers franchises is the closest to a guarantee of success in today's market. Franchising provides a safer beginning of operations and a greater likelihood of success than in stand-alone business. All the studies have shown that starting a business in the franchise system rarely fails, and when that happens, the most common reason is that the franchisee didn’t keep to the system of operation and procedures. Another reason why it is wise to buy a franchise is that the financial operations of the franchise can be thoroughly researched before entering the large expenses. When you start your own business, you always operate with a risk.

Franchisor along with its franchisees creates a franchise network and his responsibility is to ensure the operation and growth of the network. Thanks to a common brand, a franchise network quickly builds identity and reputation.

The franchisee must take into account the following:

  • must respect the relationship between the franchisor and himself that is defined by the contract
  • shall in no way compromise the reputation of the network ie. all other franchisees
  • not to betray the trust of their customers, as this harms not only themselves, but also the whole network.

 

Forms of franchising:

  • Single unit or direct franchising is the simplest form of a franchise business where the franchisor sells the right to operate a business under his name in only one business unit;
  • Master franchising is the business in which the franchisee has a right to recruit other franchisees for the same franchisor in the contractual territory.
  • Premium franchise is a form of business that allows you to take a lease of an already developed branch of Fly Fly Travel.