The term franchise was already employed in the Middle Ages, referring to authorizations or privileges as sovereign granted in favor of any citizen in relation to certain commercial activities, or fishing and exploitation of forest resources. The origin of the word franchise, is from the term “franc,” during the Middle Ages it was implemented as proposed above; in fact the first document reflecting the granting of a franchise is dated in March 1232, and was awarded in French locality of Chambey.

Franchising is a strategic business model that allows the use and transfer of technology in production and marketing of goods and services, besides simplifying access to the consumer branded products recognized at affordable prices, to develop and expand successful businesses in global markets.

In recent years, franchises in its various forms have stimulated the growth of world economy; its successful transformation process has become modest businesses in large-scale organizations that benefit from the know-how in standardized production processes, quality and service.

Because the “franchise” as a form of conservancy, steadily and increasingly have the increased presence in everyday activities we do (for example, we can eat “KFC,” enjoy a hamburger in “Bemba,” buy clothes in “BENETTON’S” or ask for a pizza at home to “Domino’s”) which is something natural in our activities, is no less true that they all represent and express widely known franchises operating in the world, and are a small show that extent and scope of the commercial formula that is its realization.

The model franchise for business development is consistent with government policies, aimed at promoting innovative projects that help create new job opportunities, bring new technologies and offer the national consumer products are marketed in other countries within the processes globalization and free trade treaties.

According to estimates by the U.S. Department of Commerce, at the end of this century 50 percent of retail sales will be handled within the system of franchises.

In recent years the system of franchising businesses reached an explosive development thanks to the globalization of economic life of nations aimed at increasing openness in this process of transformation of capitalism.

According to the administration of small businesses in the United States, franchising has several advantages over independent retailers, they are:

Reputation: It is a licensing system established and well known, the new concessionaire does not have to work to establish the reputation of the firm. The product or service being offered is already accepted by the public.

Working Capital: It costs less money to operate a business concession, because the franchisor gives the concessionaire good inventory controls and other ways to reduce costs. When necessary, the franchisor can also provide financial assistance for operating expenses.

Experience: The advice given by the franchisors offset the inexperience of the new owner.

Managerial assistance: The owner of a small independent store has to learn everything, and experienced a retailer cannot be a master in all aspects of finance, statistics, marketing and sales promotion. The best franchise companies give the dealer continued assistance in these areas.

Useful: By assuming some reasonable costs and franchise agreements on supplies, the concessionaire can usually expect a reasonable profit margin, because the business is handled with the efficiency of a chain.

Motivation: Because the franchisee and the franchisor benefit from the success of the operation, both have a vested interest in the business. Franchising is the best kept secret of the 21st Century!

JD Files is an accomplished website developer and author. To learn more about Buy N Sell – History of Franchises visit Sports Bar Franchising for current articles and discussions.

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