FRANCHISING Commercialization andservices, where thefranchisor offersthrough a contract, theauthorization for thedistribution, productionand sale of goods andservices successful thefranchisee for aspecified period.
WHO MAKE UP A FRANCHISING Franchisor: Franquiciante Franchisee: FranquiciadoThe function of franchising contract is toregulate relations between franchisor andfranchisee, providing obligations for bothparties.
ELEMENTS Brand positioning in the market. Transmission of knowledge, experiencefranchisor. License of items of property continued provisionof technical assistence to the franchisee.TYPES OF FRANCHISING• Excess product or trademark• Business Format Franchising• Franchising by convention• Social franchising
ADVANTAGES DISADVANTAGESReputation Less IndependenceWorking Capital StandardizationExperience slowManagement Assistance Cancellation of thecontractUtilities Control of franchiseMotivation Competitor
FRANCHISORADVANTAGE DISADVANTAGESFastest growing business Investment in training andsupervision.New segments The investments arerecovered in the mediumand long term.Expansion to national andinternational marketsPossible omission offranchisse on revenue,reducing royalty payments.The expansion is done withother people´s money.Undisciplined franchiseethat can alter the quality.Constant income throughroyalties.Little discipline by thefranchisee.Gets creative partners.No financial responsibility incase of bankruptcy of the
OBLIGATIONS Transmit secrets, trademarks, patents afranchisee Technical and commercial support to thefranchisee during the term of the contract. Provision of services / products Clauses franchisee activity Clause in favor of the franchisee
FRANCHISEEADVANTAGE DISADVANTAGESStart a business with littlecapital businessrecognitionNo acceses to ownershipof the brand.Allow monitoring andcontrol of the franchisor.the prestige of the brandsucces probabilityThe contracts are short (5years)Franchisor providers Payment of entry.Help in the areas ofmarketing, fanancial.sometimes maladaptive tothe philosophy of thefranchisor.Learn constant newservices/ products.loss of businessindependence.exclusivity zone. Maintain an unwantedparther, the duration of thefranchise.
OBLIGATIONS Invest in the business under the franchisorsinstructions. Payments or credits on royalties Conduct a minimum annual sales figure Use or sell the products of the brand of thefranchisor to maintain a uniform image. Duty not to compete during and after a contractyear ended.
LICENSEIt is where the trade mark owner authorizes use athird in exchange for financial compensation.DIFFERENCE BETWEEN LICENSEAND FRANCHISINGIn the franchising, the franchising is subject toadditional obligations; In the license there is freedom ofbrand, accordance with the protocols signed.
SOURCES Franquicias: Una perspectiva Mundial. (n.d.). BooksGoogle. Retrieved March 12, 2013, frombooks.google.com.co/books?APA formatting by BibMe.org. Modelos de contratos internacionales - Google Libros.(n.d.). Google Books. Retrieved April 22, 2013, fromhttp://books.google.com.co/books?id=-xdYM6VXZXQC&pg=PA86&dq=franquicias&hl=es&sa=X&ei=GcNHUYmTK4O08QS9wIHgBQ&ved=0CF4Q6AEwCA#v=onepage&q=franquicias&f=falseAPA formatting by BibMe.org. Busca Franquicias. (n.d.). Web PDF. Retrieved April12, 2013, from winred.com/biblioteca/franquicias.pdfAPA formatting by BibMe.org.