The undeniable worldwide success of franchises,
is due to the enormous advantages it offers,
consisting of a very stable model
to expand a business and penetrate markets.
It is also the safest and least risky way
for an entrepreneur to own a business, making
him the beneficiary of the synergies that franchising
offers, that is, to be part of a regional, national
or worldwide network.
|It is a strategy
that allows for the penetration and domination
of markets, that permits the owner of a trademark
to reproduce the elaboration of goods and
/ or services that he has developed successfully, through the implementation of administrative and operative procedures, so that a third party that invests work and capital, can reproduce them in other markets with the same quality.
The main consideration so that a Franchisor requires
the transfer of his know-how, is that he doesn't
have enough capital to expand his business/trademark
to other markets, and therefore requires of a
third party (Franchisee) in order to achieve this.
What is a Franchisor?
What is a Franchisee?
It is an individual or company that possesses
a certain trademark and marketing technology
(know-how) of a product or service, who
contractually cedes the rights and transfers
the use of these, as well as committing
himself to provide support and assistance
in the organizational, managerial, administrative
and marketing areas to the business of
It is an individual or company that contractually
acquires the right to market a product or service
within an exclusive market, utilizing the benefits
that he gets by using a certain trademark, and
the support he receives in the training and management
of the business.
Advantages for the Franchisor
and preservation of his trademark.
- Low investment in
the expansion of his business.
- Better operative efficiency
in the new units directly operated and supervised
by the Franchisees.
- Increase in the coverage
and development of markets.
- Charge of an initial
fee for the rights to use a trademark (which
allows him to recuperate in the medium term
the investment made in the development of
the franchise system).
- Charge of monthly
royalties based on the gross sales of the
products and services marketed through the
for the Franchisee
- Reduction in the risk and uncertainty factors
by investing in a proven business format.
- Permanent innovation in the methodological
and technological aspects of the business.
- Continuous support on the part of the Franchisor.
- Documented training based on the Operative
- Access to administrative control systems
and evaluation of the performance of his point
- Training in the productive processes of
products and services.
- Sense of belonging to a consolidated network
- Access to promotion and advertising programs.
- Increase in his personal prestige by getting
involved in a successful business concept.
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