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What is Franchising?
Home » Small Business » Franchising » What is Franchising?Franchising is an ongoing agreement between the franchisor, who thereby grants a licensing privilege, and the franchisee, who receives the licensing privilege, in which the franchisor offers support in management, development, merchandising, promotion and operation of the business.
Therefore, franchising is a way of business operation in which the franchisor, or owner of a business, obtains distribution through franchisees, or associated sellers. The owner’s or, franchisor’s, business that is sold or promoted almost always has a brand name and thus the privileged seller, the franchisee, is most typically relegated to a specific region or area. The franchisor also specifies the full extent that the franchisor will grant financial and managerial support to the franchisee.
In addition, the franchisee must follow the organized pattern and structure of business assigned by or developed by the franchisor. In essence, the franchisee sacrifices or gives up the freedom of running and owning a business in order to receive and obtain protection, security and a pre-established name.
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