Here is information organized from the sources, without
summarising:
● Franchising is when one person gives another the right to
use the same business concept or sell the same goods and
services according to certain criteria and regulations.
● When buying a franchise, the franchisor and franchisee sign
a contract called a franchise agreement.
● Three options to acquire a business are franchising, leasing,
and outsourcing.
● The person who owns the overall business rights and
trademarks and grants the rights to another person to
operate a branch of the business is the franchisor.
● The person or party buying the franchise is known as the
franchisee.
● The franchisee pays the franchisor a percentage of business
turnover, which is called royalty fees.
● The franchisor receives skills, training, and support in
exchange for a fee from the franchisor.
● There are three types of documents signed when buying a
franchise: disclosure document, franchise agreement, and
personal guarantee.
● The disclosure document contains all the information about
the franchise which must be examined carefully before
signing the franchise agreement. It includes information such
as:
○ CV of the franchisor
○ Details of the franchise
○ Estimated start-up costs, operating costs, financial
obligations, and royalties
○ Details of the area in which the branch will be located,
including any restrictions
○ Details of the services and support that will be
provided to the franchisee by the franchisor
○ Details of the product or service that will be sold
○ Details of what will protect or service
○ Details of any obligations and duties of both the
franchisor and franchisee
● The franchise agreement should include:
○ The form of ownership that the franchisee will operate
under
○ Details of the intellectual and/or commercial property
○ Operational details including product, pricing and
marketing strategy
○ The training of staff members
○ Details of the financial obligations
○ The formula used to calculate royalties
○ A termination clause
● A personal guarantee is an agreement between the
franchisor and franchisee that states that the franchisee will
be personally responsible for paying for all contractual
commitments including financial responsibilities to the
franchisor as per the franchise agreement.
● Franchises are able to receive support, guidance, and advice
from the network of other franchisees.
● Financial advice and business management advice are often
provided to franchisees.
● A non-disclosure agreement (NDA) ensures the franchisee
does not disclose any trade secrets or confidential
information about the franchise and its operation.
● A lease is a business arrangement where one business
allows another business to use an asset in return for a fee.
The person who owns the asset is known as the lessor, and
the person who uses the asset is the lessee. The lessor makes
the asset available to the lessee to use, and in return the
lessee pays an agreed amount called leasing fee or leasing
charges.
● Outsourcing is purchasing goods and/or services from
another business or paying an external company to do work
that could be or was previously done in-house. The external
company or business that produces the goods or provides the
service is known as sub-contractors or vendors.
● Return on investment (ROI) is used to evaluate the
efficiency or profitability of an investment.