Trading franchises - what they are and how they work. Franchise in trade - concept, mechanism and principles of operation Franchise of wholesale food sales

A franchise is a set of benefits necessary for running a business, which includes the franchisor's business model, brand and other components. entrepreneurial activity... A franchise in trade may include original technology, method of doing business, and trademark and use of equipment. All this is transferred for a fee from the owner to the recipient, along with obligations and benefits.

Franchising in trade is the easiest and fastest way to promote your business on the market, since the franchisee gets at its disposal a deliberately profitable profitable business. In addition, the franchise seller is usually willing to provide comprehensive assistance and support to his franchisee (buying party), because the success of his venture lies in the best interests of the franchisor (selling party).

Franchise cost: components

To buy a franchise in trade, you must pay a mandatory lump-sum (total) fee, which confirms the buyer's rights to use a set of conditions. Also, the franchisee pays a certain percentage of the turnover (royalties) to the trademark owner on a monthly basis. In addition, the cost of the franchise includes capital that will cover the costs of starting a business (the price of rent / purchase of premises, equipment, payment for employees, etc.). These funds are transferred to the franchisor if he transfers the “finished” outlet to the buyer. Use the catalog of franchises on our portal to choose the most profitable franchise.

Franchise benefits in trade

A franchise provides tremendous benefits to a company or an entrepreneur who decides to start a business, for example:

• No need to promote a brand. Usually brands transferred under a franchise agreement are recognizable, and therefore do not need active promotion.
• Rapid business development. Buying ready business, the entrepreneur immediately goes to normal trading volumes. He does not need to win the trust of potential buyers.
• Consulting, training and comprehensive support. Thanks to the active support of the franchisor, the franchise user avoids typical mistakes, which is accepted by almost all entrepreneurs starting their business from scratch.
• Stable market position. A franchise assumes clear territorial boundaries for doing business, which automatically excludes the appearance of competitors.

Thus, a franchise is a profitable way to establish a business and generate income.

The trading franchise is currently very popular among aspiring entrepreneurs in Moscow, St. Petersburg and other regions of Russia. This is explained, first of all, by the fact that the overwhelming majority of them, striving to maintain their positions in the market, prefer to cooperate with more experienced entrepreneurs. To this end, they acquire various types of retail franchises. The period of the financial crisis is especially beneficial for buying a boutique on a franchise. Buying a franchise of a store for novice businessmen is also driven by the need to increase revenue, build a stable customer base, and reduce costs.

Those who decided to open their own franchise boutique retail, select the most suitable retail franchise based on the size of the initial investment, the payback period, as well as the speed of reaching the break-even point.

Benefits of a retail store franchise

The biggest benefit for franchisees is the savings in their own Money... In addition, they enlist marketing, accounting, and legal support from franchisors who are already experienced in the trade and have some market influence.

The vast majority of franchisor organizations provide free consultation, assistance in the selection and training of employees.

It is possible to create franchisees of their own franchise networks. It is especially relevant in cases where it is planned to work not only in large cities, but also in small towns. For a franchisee, this is much more effective than joining an existing franchise network.

Retail franchise catalog

The store catalog contains a wide variety of franchise offers trading companies and boutiques for those who are going to buy trading company... The most popular franchise offers from retailers contained in the catalog today are:

• a chain of boutiques of flax and sheep wool "Modnaya Ovechka";
• salon of auto parts "Korika-auto";
• salon men's clothing Circle Boutique;
• shoe salon self made"Migliori;"
• network of auto parts stores for foreign cars "Auto-Koreets", "Auto-Yaponets".

If you are interested in the offer of any particular organization from those presented in the catalog, then you can go directly from the catalog to the official website of this organization to get more detailed information on the terms of cooperation, the amount of initial investment, the amount of royalties, requirements for the franchisee

Franchising is a common form of business partnership. Its popularity this direction won in many segments, but most often it is found in trade. Each of us probably bought a product or used the services of a franchise company without knowing it.

Franchise - what is it in trade?

A franchise is a type of commercial concession market relationship. It means long lasting business cooperation and partnerships of several companies.

The essence of franchising is the resale of the right to use a brand along with the established technology of doing business. As a rule, a large well-known company with an advertised name resells the right to use it together with the technique of selling goods to other market participants - companies independent of it.

The following participants are distinguished in the franchise agreement:

• A franchisor is an enterprise that transfers its brand, know-how, business scheme or operating systems for use for a set fee.
• A franchisee is a company that acquires the opportunity for training and assistance in starting a new business project, wishing to work under a well-known trademark, and also paying an agreed amount for the use of a trademark, know-how and other business tools.

They form a reliable partnership scheme based on the principles of mutual benefit. The parent company receives additional income from the sale of the right to use the brand, the ability to expand and increase awareness, and develop new regions. The franchisee, in turn, having no experience in a particular field, can start working under a well-known name, use technologies that have already shown their effectiveness, and not risk losing the initial investment.

What is a franchise and how does it work?

The word franchise means permission to trade. For example, the 33 Medveda enterprise produces waffles that are in demand on the consumer market. Special equipment has been developed, which has shown efficiency, and there is a desire to open new points, but financial assets for further development not enough. This is how the need to sell the franchise arises.

After submitting an advertisement, the business owner receives offers of cooperation. A young entrepreneur who has a start-up investment wants to enter the market under the name "33 Bears", which is known in his city. He is ready to pay for the process of joining the franchise network, deduct periodic payments after making a profit, use the recommendations of the parent company and work according to the established rules. For this, he receives a number of advantages over newcomer companies that are trying to conquer a niche on their own. “33 Bears” has already shown its effectiveness, so the franchisee has minimized risks and can work using a proven model of doing business in trade.

There may be several options for cooperation - the franchisee independently manufactures waffles by purchasing equipment, or simply sells them by purchasing products from the franchisor. In addition to production technology, he can use many years of experience, business support and consulting support from his partner. Thus, the franchisee skips the process of becoming, minimizes risks.

Today's statistics in small business are disappointing: half of the newly opened trade companies stop their activities before they have worked for a year. Another 20% of the rest are closed within 2-3 next years... In conditions of fierce competition and oversaturation of the market, the strongest survives, who has many years of experience or successful systems doing business.

Popular and stable enterprises annually spend large investments on advertising, promotion brand... It takes a lot of resources to inform the potential client about the location point of sale... When buying a franchise in trade, a franchisor company most often supplies a brand book, advertising materials. Moreover, she is interested in promoting her partner - franchisee, therefore she will provide all kinds of multi-level support. She often helps with the formation of an assortment line, choosing a place for a future outlet.

The history of the concept of "franchise"

The term "franchise" was first used in 1851. The founder of this partnership in the field of trade can rightfully be considered the company "Singer", a manufacturer of sewing equipment. It was the first company that began to sign agreements with partners for the right to sell and provide services for the company's products in the specified territory of the United States.

At that time, Singer founded a new distribution and advertising model, which formed the basis of the franchise in trade. After that, such a partnership began to develop in the automotive industry, during the World War it migrated to the hotel and catering business... But the big breakthrough came in the 50s after the opening of the McDonald's network.

In 2000, more than 8 thousand franchisors successfully worked on the world trade market, today this figure has increased to 18 thousand franchise sellers and more than 1500 million franchisees.

How much does a trade franchise cost?

Those wishing to work on a franchise in the trade will have to pay for the use of the trademark. In this case, the monetary equivalent depends on pricing policy and the requirements of the franchisor. But regardless of the specifics of the company, whether it will be or, all payments are of two types:

1. - one-time payment for work under the chosen brand. The partner pays for it upon signing the contract. Its size depends on the specifics of the franchisor company. It can be different - from hundreds of dollars to hundreds of thousands of dollars. The amount of the payment is influenced by the brand awareness and the scale of the business. For example, the opening of a software supermarket will be much higher than the launch of a new cheburek shop.
2. Royalties are periodic financial deductions in trade from the franchisee's turnover. The amount of such contributions can also vary depending on the requirements of the franchise seller, usually 3-10% of the turnover.

Advice: It cannot be argued that royalties and lump-sum payments are solely a purchase of the right to use a brand. In addition, the franchisee receives support - consulting support, recommendations for opening a point (from the design of the premises for trading and ending with technologies that simply need to be adapted to their conditions and requirements).

Advantages and Disadvantages of Franchise Cooperation in Trade

Franchising partnerships have both supporters and opponents. The great popularity of such a mechanism for doing business speaks of a number of benefits, but like any other model, it is not without its drawbacks.

pros

For a franchisee, a franchise business management system in trade means having your own business, professional support. A number of advantages can be distinguished:

1. A ready-made business that practically guarantees a stable income. The partner can evaluate the effectiveness by studying the activities of the parent company. If she has established herself in the domestic or even international market, is in demand, is actively developing, why not consider and purchase one of them?
2. Buying a franchise is a reliable method to master a specific niche in the trade and expand your business.
3. By signing a franchise agreement in trade, a partner gets the right to work under a well-known brand, there is no need to spend resources and time on promoting his company, conducting marketing activities. All this has already been done by the franchisor.
4. Support of the copyright holder - since the franchise seller himself is interested in the success of the new venture, he will provide comprehensive assistance, especially at first. The degree of support depends on the company itself, it can be staff training, the provision of advertising materials, support when concluding a lease agreement, legal assistance, etc.
5. Providing the knowledge base and valuable information you need to get started. Not every novice entrepreneur who opens a business on his own can get such information - this is an analysis of the market, competitors, consumer demand.
6. A franchise in trade is not only instructions and work schemes. Collaboration presupposes constant partnership, which a beginner so lacks.

Minuses

Besides the explicit undeniable advantages, the model is not without its drawbacks:

• Additional financial expenses... Payment of royalties and lump-sum payment can be quite high, this money could be used to develop their own business. Therefore, many do not want to overpay and start a business on their own.
• Compliance with strict regulations. After signing a trade franchise, the franchisee must follow the established rules. They may relate not only to the specifics of the design of the premises, but also to the choice of assortment, customer policy, and the choice of suppliers. Some requirements may not be pleasant to the franchisee, but he is obliged to fulfill them.
• Periodic quality control. Since the parent franchisor company cares about its reputation, it regularly checks the activities of its franchise outlets. Constant checks can hinder their activity.
• Closed list of suppliers. Many franchisors specify specific suppliers with which the franchise buyer should work. In some cases, this is impractical due to the territorial location or regional characteristics.
• Ability to terminate the agreement unilaterally. If, in the opinion of the franchisor, his partner does not comply with the terms of the contract, he can terminate it.

Save the article in 2 clicks:

A franchise in trade is suitable for those who do not want to start on their own and want to hedge themselves by receiving support from information resources more famous company... This means that in this case, resources are not needed to promote the brand, since the parent company has already done this. In this case, you need to sacrifice a certain amount of independence and give a part of your proceeds.

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This is an opportunity to lead own business under the brand and with the support of a well-known company. In short, it is the right to use the brand, the current business model and control by the brand owner (franchisor).