Franchising is an exchange of interests between franchisors and franchisees in order to achieve a win-win situation.

Franchising means that the licensor licenses its trade name, trademark, service mark, trade secret, etc. to the operator under certain conditions, allowing him to engage in the same business as the franchisor within a certain area. business.

Franchising originated in the United States. In 1851, in order to promote its sewing machine business, Singer Sewing Machine Company began to grant sewing machine distribution rights, set up franchise stores across the United States, and wrote the first standard franchise contract. , is recognized in the industry as the origin of commercial franchising in the modern sense.

Nature classification:

Business franchising can be divided into three types according to the form of the franchise, the content and method of authorization, and the strategic control means of the headquarters.

1. The production franchisee invests in building a factory, or uses the franchisor's trademark or logo, patent, technology, design and production standards through OEM to process or manufacture the franchised products. It is then sold through a dealer or retailer, and the licensee does not deal directly with the end user (consumer). Typical cases include: Coca-Cola's bottling plant and the production of Olympic Games logo products.

2. Product-trademark The franchisee uses the franchisor’s trademark and retail method to wholesale and retail the franchisor’s products. As a franchisee, the franchisee still maintains the trade name of its original enterprise and sells products produced by the franchisor and for which the trademark is owned, either solely or in conjunction with other products.

3. Business model: The franchisee has the right to use the franchisor’s trademark, trade name, corporate logo and advertising, and operate it in full accordance with the single store business model designed by the franchisor; the franchisee is known among the public It appears completely as the franchisor's enterprise; the franchisor implements unified management of the franchisee's internal operation management, marketing and other aspects, and has strong control.

Public Utility Franchise

The "Municipal Utility Franchise Management Measures" promulgated in March 2004 stipulates: "Municipal public utility franchising refers to the government's franchising in accordance with relevant laws and regulations. It stipulates that municipal utility investors or operators will be selected through market competition mechanisms and the system for operating certain municipal utility products or providing certain services within a certain period and scope will be clarified, "because this kind of franchise is a franchise authorized by the government. Operation can be called "administrative franchise".

The scope of franchising in the municipal public utility industry includes: urban water supply, gas supply, heat supply, sewage treatment, garbage disposal and public transportation, etc., which are directly related to the interests of the public and involve limited public companies. ***Resource allocation industry.