What is a Franchise and How does it work
                     WHAT IS A 
FRANCHISE AND 
HOW DOES IT 
WORK?
Introduction
 Franchi s ing  i s  a  spec ia l  way o f  s t ruc tur ing  a  bus iness  
re lat ionsh ip .  
 For  those  who fi nd the  idea o f  own ing the i r  own 
bus iness  in t r igu ing,  but  pre fer  a  mode l  to  fo l l ow,  a  
f ranchi se  may be  jus t  the  t i cket .  
Source: smallbiztrends.com
Franchisor
 Th is  i s  the  brand or  company that  c reates  the  
or ig ina l  bus iness  and then  deve lops  the  b luepr in t .  
 The f ranchisor  grants  to  th i rd  par t i es  the  r i ght  to  
carry  on  a  bus iness  out le t  under  the  brand’s  name 
and t rademark ,  accord ing  to  an ident ifi ed  sys tem,  
usua l ly  w i th in  a  spec ifi c  te rr i tory  or  at  a  spec ifi c  
locat ion ,  for  an agreed-upon per iod  o f  t ime.
Source: smallbiztrends.com
Franchise opportunity
 You get  to  draw upon a l l  the  work  the  f ranchi se  has  
done  before  you  to  tes t ,  refi ne  and per fec t  the  
bus iness  concept .
 You ge t  to  lean  on  the  mother-sh ip ’s  brand,  buying  
power ,  proven f ranchise  systems,  adv ice ,  t ra in ing ,  
techno logy and nat iona l  marke t ing .
Source: smallbiztrends.com
Fundamentals of How a 
Franchise Works
 Governed by  Federa l  and  s tate  laws
 Long te rm contrac t
 Rules  to  fo l low
 Independent  bus iness  owner
 Sca lab le  mode l
Source: smallbiztrends.com
Multi-unit Franchises
 Owning mul t i p le  un i ts  o f  a  f ranch ise  i s  the  path  that  
many weal thy  f ranch ise  bus iness  owners  have  taken .
 Prospect ive  f ranch isees  who are  growth-or iented  w i l l  
keep the  future  in  mind  f rom the  s ta r t .  
 Chances  are  you  wi l l  want  more  than  one  ind iv idua l  
f ranchi se  out le t  a f te r  you  ge t  your  arms around 
running  your  fi rs t  un i t .
Source: smallbiztrends.com
Master Franchises 
 There ’s  a l so  someth ing  ca l led a  maste r  f ranchi se .  In  
a  maste r  f ranch ise  one  buys  the  r i ghts  to  an  ent i re  
area,  and  i t ’ s  usua l ly  based on  popu lat i on .   
Source: smallbiztrends.com
Franchise Agreement
 Jus t  l i ke  every  offi c ia l  agreement  requ i res  lega l  
paperwork ,  the  f ranchi se  agreement  i s  the  lega l  
paperwork  for  own ing  a  brand’s  f ranch ise .  
 I t  i s  a  wr i t ten  lega l  document  which i s  the  base  o f  a  
f ranchi sor- f ranchisee  re lat ionsh ip .  
Source: www.franchiseindia.com
Franchise business model 
 A f ranch ise  i s  a  k ind  o f  bus iness  owned by  a  person  
ca l l ed  a  f ranchi see  under  the  brand,  t rademark ,  and  
bus iness  mode l  owned by  a  company ca l led  the  
f ranchi sor.
Source: smallbiztrends.com
Responsibilities Of The 
Franchisor
 Tra in ing  requi rements
 Requi rements  re lated to  par t i c ipat ing in  the  bus iness
 Requi rements  re la ted  to  mainta in  and submi t  the  
records
Source: okcredit.in
Conclusion
 These  are  the  bas ic  gu ide l ines  for  a  f ranch ise  
bus iness  mode l  and  how a  f ranchise  works .
 The in format ion  shared  in  th i s  ar t i c le  w i l l  he lp  you  
understand how the  f ranch ise  works  and gu ide  you  
wi th  a  success fu l  f ranch ise  bus iness .
Source: okcredit.in