The types of franchising include trademark franchising, business model franchising, single entity franchising, etc.

1. Trademark franchise

Trademark franchise means that the franchisor transfers the manufacturing and operating rights of a specific brand of products to the franchisee. The franchisor provides the franchisee with intellectual property rights such as technology, patents and trademarks, as well as the right to use it within the specified scope, and does not impose strict regulations on the subsequent production and operation activities of the franchisee.

2. Business model franchising

Business model franchising is called the second generation of franchising, and this is what people usually call franchising. Business model franchising not only requires franchise stores to operate the products and services of the head office, but also requires quality standards, business policies, etc. to be carried out in a manner specified by the franchisor. The franchisee pays a franchise fee and subsequent royalties, which enable the franchisor to provide training, advertising, research and development and follow-up support to the franchisee. This model is currently developing rapidly.

3. Single franchise

Single franchise means that the franchisor gives the franchisee the right to open a franchise store in a certain location. The franchisor and the franchisee directly sign a franchise contract, and the franchisee personally participates in the operation of the store. The economic strength of the franchisee is generally weak. Single franchise is suitable for developing franchise outlets in a small space area.

Advantages of franchising

Franchisors can maintain a small scale while implementing centralized control, and can earn reasonable profits without involving high capital risks, let alone balancing Daily chores for franchisees. Since franchise stores have a deeper understanding of the area they belong to, it is often easier to discover business scope that the company has not yet covered. Since the franchisor does not need to be involved in the employee management of franchisees, it has relatively few employee issues to deal with.

Franchisees can enjoy ready-made goodwill and brand. Because franchisees have inherited the goodwill of the franchisor, they have a good image during the opening and entrepreneurship stages, allowing many tasks to be carried out smoothly and avoiding market risks. By investing in a franchisor with good performance and strength, franchisees can rely on its brand image, management model and other support systems, and their risks are greatly reduced.

Reference for the above content: Baidu Encyclopedia-Franchise