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Franchise

Lord Buddha Institute Of Computer Science
Shree Ram Shikhsya Peeth
Franchise

Franchise generally means a right or privilege. This organization gives Franchise to other organization if that need for the real development of society. We have two educational institutions under this system in one work for the youth development and another for the orphan. The meaning of franchise is different and analysis but in this place for the development of society the organization can give franchise to another organization with out ant law and justice. Because there is no law and justice for restrict the public development. 

But if the real value of franchising we see we have to meet that franchise is the practice of using another firm's succesful business model, a concept that is growing rapidly across the world. The word franchise is of anglo-french derivation - from franc- meaning free, and is used both as a noun and as a (transitive) verb. For the franchisor, the franchise is an alternative to building chain stores to distribute goods and avoid investment and liability over a chain. The franchisor's success is the success of the franchisees.

    On the part of the franchisee, he is said to have a greater incentive than a direct employees because he has a direct stake in the business. A well run franchise would offer a turnkey business. However, it must be noted that, except in the US, where there are explicit Federal and State laws covering franchise, most of the world recognizes franchise but rarely makes provisions (legal) for it. Franchise is considered as a ditribution system, whose laws apply, with the trademark of the franchise covered by specific covenants. Businesses for which franchising works best have the following characteristics: Businesses with a good track record of profitability. Businesses which are easily duplicated. As practiced in retailing, franchising offers franchisees the advantage of starting up quickly based on a proven trademark , and the tooling and infrastructure as opposed to having to build a one. Each party to a franchise has several interests to protect. The franchisor is most involved in securing protection for his trademark , controlling the business concept and securing his know-how. This requires the franchisee to carry out the services for which the trademark has been made prominent or famous.

    There is a great deal of standardization proposed. The place of service have to carry the franchisor's signs, logos and trademark in a prominent place. The uniforms worn by the staff of the franchisee have to be of a particular shade and colour. The service has to be in accordance to the pattern followed by the franchisor in his successful operations. Thus, for the franchisee he is not in full control of the business as he would be in retailing.

    But there are fault-lines here! A service can be successful by buying equipment and supplies from the franchisor or those recommended by the franchisor if they are not over-priced which they tend to be). A coffee brew, for example, can be readily identified by the trademark when its raw materials come from a particular supplier.If the franchisor requires purchase from his stores, it may come under Anti-trust legislation or equivalent laws of other countries. So too the purchase of uniforms of personnel, signs, etc. But it also applies to sites of franchise if they are owned or controlled by the franchisor. The franchisee must carefully negotiate the license. He, along with the franchisor must develop a marketting plan or business plan. The fees must be fully disclosed and there should not be any hidden fees. The start-up and costs and working capital must be known before taking the license.

     There must be assurance that additional licensees not crowd the territory if the franchise is worked to plan. The franchisee must be seen as an independant merchant. He must be protected by the franchisor from any trademark infringement by third-parties. A franchise attorney is required to assist the franchisee during negotiations. Most often the training period - the costs of which are in great part covered by the initial fee - is too short to operate complicated equipment and the franchisee has to learn on his own from Manuals.

     The training period must be adequate but in low-cost franchises it would be considerd expensive. Many frachisors have set up a corporate universities to train staff online. This is in addition to literature and sales documents and reach by email. It should also be noted that franchise agreements carrry no guarantees or warranties and the franchisee has little or no recource to legal intervention in the event of a dispute. Franchise contracts tend to be unilateral contracts if favor of the franchisor; they are generally protected from lawsuits from their franchisee because of the non-negotiable contracts that require franchisees to acknowledge, in effect, that they are buying the franchise knowing that there is risk, and that they have not been promised success or profits by the franchisor. Contracts are renewable at his sole option. Most franchisors make franchisees sign agreements waiving their rights under federal and state law, and in some cases allowing the franchisor to choose where and under what law any dispute would be litigated.

 

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