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Types of Franchising Michael Isakson Chairman of IFA International Committee

Types of Franchising Michael Isakson Chairman of IFA International Committee International Franchise Association (IFA) . A franchise is the agreement or license between two legally independent parties which gives:. the franchisee the right to the trademark

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Types of Franchising Michael Isakson Chairman of IFA International Committee

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  1. Types of Franchising Michael Isakson Chairman of IFA International Committee International Franchise Association (IFA)

  2. A franchise is the agreement or license between two legally independent parties which gives: • the franchisee the right to the trademark • the franchisee the right to use the operating methods • the franchisee the obligation to pay the franchisor fees for these rights • the franchisor the obligation to provide rights and support to franchisees

  3. • has a contractual relationship with the supplier • buys from the supplier and sells in smaller quantities • is familiar with local markets and customers

  4. A licensee to pays for the rights to use a particular trademark. Licensors are mainly interested in collecting royalties and supervising the use of the license, not influencing the operations of the business. Visit www.licensing.org.

  5. Product distribution franchises are simply supplier-dealer relationships. The franchisor licenses its trademark and logo to the franchisees but typically does not provide them an entire system for running their business.

  6. Business format franchises not only use a franchisor’s product, service and trademark, but also the complete method to conduct the business itself, such as the marketing plan and operations manuals. Business format franchises are the most common type of franchise.

  7. There are different types of franchise arrangements

  8. AREA DEVELOPMENT FRANCHISE • Franchisee has the right to open more than one • The franchisor grants the franchisee exclusive rights Franchisee has the right to open more than one unit during a specific time, within a specified area

  9. MASTER FRANCHISE • Right, obligation to open, operate a certain number of units in a defined area, the master franchisee also has the right to sell franchises Franchisee has the right to open more than one unit during a specific time, within a specified area

  10. AREA REPRESENTATIVE • Buys a territorial franchise to sell and service unit franchisees • Does not contract with the unit franchisees, but does receive a portion of the initial and ongoing fees paid to the franchisor. Franchisee has the right to open more than one unit during a specific time, within a specified area

  11. INTERNATIONAL DEVELOPMENT MODELS Country Master Franchise - MOST COMMON Franchisor Master Franchisee Sub-Franchisee Sub-Franchisee Or Direct Ownership

  12. INTERNATIONAL DEVELOPMENT MODELS Area or Province Franchise Development Agreement Franchisor Area Developer Franchisee Franchisee Franchisee

  13. INTERNATIONAL DEVELOPMENT MODELS Joint Venture License Franchisor Joint Venture (Franchisor & Third Party) Sub-Franchisee Joint Venture Owned Unit

  14. INTERNATIONAL DEVELOPMENT MODELS Direct Franchise - LEAST COMMON Franchisor Franchisee Franchisee Franchisee

  15. CONVENTION.FRANCHISE.ORG

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