Franchise


A franchise is a branch of a large distributor of goods and services. Franchises have been known since ancient times as the concession that the owner of a business gives to a third party in order to distribute and obtain profits from the sale, having these rights and permissions for the distribution of products or services. From this right, not only the name of the distributor is obtained, but also the link for future businesses that are developed.

The head office owner or “The Franchisor” transfers all of its operating systems, know-how, marketing systems, training systems, management methods and all relevant information to get the branch up and running. He also trains the new investor or “Franchisee” and provides training and support throughout the life of the Franchise Agreement.

The Franchisor already with experience in the matter, offers the Franchisee the maximum guarantee of profits, indicates the strategies and best places to place the business, His concept must have a high degree of systematization. The franchise must provide opportunities, not generate problems, that is why the owner must create a system that makes the work of its new partner easier, thus reflecting experience and security. But just as the Franchisor must guarantee that the Franchisee is “Comfortable” he must also ensure that the branch of his company complies with what is established in the agreements.

The word Franchise comes from the Middle Ages, meaning a privilege or a right. Then, the sovereign or local lord, granted the right to occupy the markets or fairs, or to hunt on his land. Over time the rules governing franchises became part of the Common Law of Europe. This business format is one of the most popular and sustainable at the moment. Large companies have survived the ravages of the economic crisis thanks to the expansion that is generated from the generation of different distribution points.