How does a franchise work?
                     HOW DOES A 
FRANCHISE WORK?
INTRODUCTION
 Franchising is a special way of structuring a business relationship. 
 For those who find the idea of owning their own business intriguing, 
but prefer a model to follow, a franchise may be just the ticket. 
Source: smallbiztrends.com
FRANCHISOR
 This is the brand or company that creates the original business and 
then develops the blueprint. 
 The franchisor grants to third parties the right to carry on a business 
outlet under the brand’s name and trademark, according to an 
identified system, usually within a specific territory or at a specific 
location, for an agreed-upon period of time.
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FRANCHISE OPPORTUNITY
 You get to draw upon all the work the franchise has done before you to 
test, refine and perfect the business concept.
 You get to lean on the mother-ship’s brand, buying power, proven 
franchise systems, advice, training, technology and national 
marketing.
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FUNDAMENTALS OF HOW 
A FRANCHISE WORKS
 Governed by Federal and state laws
 Long term contract
 Rules to follow
 Independent business owner
 Scalable model
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MULTI-UNIT FRANCHISES
 Owning multiple units of a franchise is the path that many wealthy 
franchise business owners have taken.
 Prospective franchisees who are growth-oriented will keep the future 
in mind from the start. 
 Chances are you will want more than one individual franchise outlet 
after you get your arms around running your first unit.
Source: smallbiztrends.com
MASTER FRANCHISES 
 There’s also something called a master franchise. In a master 
franchise one buys the rights to an entire area, and it’s usually based 
on population.  
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FRANCHISE AGREEMENT
 Just like every official agreement requires legal paperwork, the 
franchise agreement is the legal paperwork for owning a brand’s 
franchise. 
 It is a written legal document which is the base of a franchisor-
franchisee relationship. 
Source: www.franchiseindia.com
FRANCHISE BUSINESS 
MODEL 
 A franchise is a kind of business owned by a person called a franchisee 
under the brand, trademark, and business model owned by a company 
called the franchisor.
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RESPONSIBILITIES OF THE 
FRANCHISOR
 Training requirements
 Requirements related to participating in the business
 Requirements related to maintain and submit the records
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CONCLUSION
 These are the basic guidelines for a franchise business model and how 
a franchise works.
 The information shared in this article will help you understand how the 
franchise works and guide you with a successful franchise business.
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