Franchise refers to the business operation mode in which the franchise owner allows the franchisee to use its name, trademark, proprietary technology, products and operation management experience for business activities in the form of contract.
franchising is translated from English. At present, there are two kinds of translation and understanding of franchising in China: one is franchising. It belongs to the category of stores with different ownership to juxtapose franchise organizations with chain stores, free chains and cooperatives. This translation method is the same as the definition of western marketing, and it is a common translation method.
another translation is franchise chain. It is considered that franchise chain is an organizational form of chain stores, and it is juxtaposed with company chain and free chain as three types of chain stores. In China, Article 2 of the Measures for the Administration of Commercial Franchise promulgated by the Ministry of Commerce No.25 in 24 is defined as: Commercial franchising means that by signing a contract, the franchisor grants the franchisee the business resources such as trademarks, trade names and business models that he has the right to grant to others for use, and the franchisee engages in business activities under the unified management system according to the contract, and pays the franchise fee.
Although different countries and organizations have different definitions of franchising, generally speaking, franchising has the following characteristics:
First, franchising is a contractual relationship between franchisor and franchisee;
second, the franchisor will allow the franchisee to use its own trade name and/or trademark and/or service mark, business know-how, business and technical methods, continuous system and other industrial and/or intellectual property rights;
thirdly, the franchisee invests in its business and owns its business;
fourthly, the franchisee shall pay the fees to the franchisor;
fifth, franchising is a continuous relationship.
refers to a contractual relationship between the franchisor and the franchisee. In this relationship, the franchisee provides or is obliged to maintain its interests in franchise business activities in such aspects as technical secrets and training employees; The franchisee is allowed to use the trademark, trade name, corporate image, working procedures, etc. owned or controlled by the franchisor, but the franchisee owns or invests in a considerable number of enterprises.
franchising is the mainstream business model in the 21st century. As a business method, it can be extended to any industry. According to the definition of the Ministry of Commerce of China, franchising means that by signing a contract, the franchisor grants the franchisee the business resources such as trademarks, trade names and business models that he has the right to grant to others for use; According to the contract, the franchisee engages in business activities under the unified management system and pays franchise fees to the franchisor.
franchising originated in the United States. In 1851, Singer Sewing Machine Company began to grant sewing machine franchise rights to expand its sewing machine business, and set up franchise stores all over the United States. Written the first standard franchise contract, which is recognized as the origin of commercial franchise in the modern sense in the industry.
commercial franchising is different according to its franchise form, authorization content and method, and strategic control means of headquarters. Can be divided into three types;
1. The production franchisor invests in a factory, or uses the franchisor's trademark or logo, patents, technology, design and production standards to process or manufacture the licensed products through OEM, and then sells them through dealers or retailers. The franchisee does not directly deal with the end users (consumers). Typical cases include: Coca-Cola's bottling plant and the production of Olympic logo products.
2. Products-Trademark Franchisees use the franchisor's trademarks and retail methods to wholesale and retail the franchisor's products. As a firm that still maintains its original enterprise as a franchisee, it sells products produced by the franchisor and obtained trademark ownership singly or while selling other commodities.
III. Business model The franchisee has the right to use the franchisor's trademark, trade name, corporate logo and advertising, and operate in full accordance with the single-store business model designed by the franchisor; The franchisee completely appears in the public as a franchisor enterprise; The franchisor has a strong control over the franchisee's internal operation management and marketing.
different definitions: Franchising: it is a variant of license trade, in which the franchisor transfers the whole operating system or service system to an independent operator, who pays a certain amount of Franchise fee.
European Franchise Association: Franchising is a system for marketing products, services or technologies. The franchisor and his single franchisee are relatively independent in law and finance, but they maintain close and continuous cooperation. The franchisee relies on the rights and obligations granted by the franchisor to operate according to the franchisor's concept. Through direct or indirect financial exchange, the franchisee can use the franchisee's trade name, trademark, service mark and business know-how. Commercial and technical methods, continuous systems and other industrial or intellectual property rights shall be operated within the framework and terms of a written franchise contract agreed by both parties.