Franchising is a business model in which the franchise owner, in the form of a contract, allows the franchisee to use its name, trademark, proprietary technology, products, operation and management experience, etc. for a fee to engage in business activities. .

Pros: Being able to maintain a small scale while implementing centralized control, it can earn reasonable profits without involving high capital risks, let alone the daily chores of franchisees.

Disadvantages: For consumers, frequent changes in franchisees bring confusion to them, resulting in unclear responsibilities and mutual evasion between the franchisor, current franchisees and previous franchisees. responsibility.

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Notes:

The basic forms of franchising in Article 5 of the "Commercial Franchise Management Measures (Trial)" include: direct franchising - -That is, the franchisor grants the franchise right directly to the franchise applicant. The franchisee who has obtained the franchise right shall establish a franchise outlet and carry out business activities in accordance with the franchise contract, and shall not transfer the franchise right again.

Sub-franchise (regional franchise) - that is, the franchisor grants the exclusive franchise right in the designated area to the franchisee, and the franchisee can grant the franchise right to other applicants, or You can open franchised outlets in the area to engage in business activities.

The franchisee needs to know what kind of franchise he wants to obtain. It can be seen from the regulations that the franchisee has a lot of room for maneuver in obtaining a regional franchise, but the franchisor generally does not easily grant such rights unless the franchisee has sufficient convincing financial strength and market development potential.

Baidu Encyclopedia-Franchise