What are the different types of franchising?
The following are the different types of franchising
– Product franchise business opportunity:
– The manufacturer authorize a store owner to distribute their products.
– The store owner can also use the name and trade mark of the manufacturer.
– The store owner has to pay certain fee and buy certain minimum stock from the manufacturer.
– Example: Tire franchises
– Manufacturing franchise opportunity:
– The franchisor authorizes a manufacturer to manufacture and sell their products.
– Mostly found in food and beverage industry.
– The bottles and other ingredients are supplied by the franchisor.
– The franchise will produce, bottle and distribute soft drinks
– Business franchise opportunity ventures:
– A business should purchase and distribute products for one specific company.
– The company will provide customers or accounts to the business owner.
– The business owner pays a fee or other consideration to the company.
– Examples are vending machine routes and distributorships
– Business format franchise opportunity:
– The company provides a business owner with a proven method of running a business. The company will provide all the assistance to set up and run the business.
– The business owner can use the company name and trademark.
– The company collects a fee or royalty in return from the business owner.
– At times, the business owner has to purchase the inventory from the company.
– This is the most popular form of franchising.
– Examples are KFC , McDonalds and Dominos
Additional content on this topic can be found at http://www.eduxir.com/curriculum/cbse/class-xii/entrepreneurship/enterprise-growth-strategies/