Franchising is a contractual relationship between a franchisor and franchisee where the franchisor offers business support to the franchisee in exchange for fees and royalties. The franchisee operates under the franchisor's brand name and system. There are advantages to both parties - franchisors gain faster growth and revenue, while franchisees benefit from an established brand, support system, and proven business model. However, franchising also comes with disadvantages like loss of independence and contractual restrictions for franchisees, and reduced control and support costs for franchisors.

1. Franchising

2. What is a Franchise? “A franchise operation is a contractualrelationship between the franchisorand franchiseein which the franchisor offers or is obliged to maintain a continuing interest in the business of the franchisee in such areas as know-how and training; wherein the franchisee operates under a common trade name, format and/or procedure owned or controlled by the franchisor, and in which the franchisee has or will make a substantial capital investment in his business from his own resources.”

4. Use of franchisor’s trade name, format, system and/or procedure under license

5. Means to raise capital and expand quickly

6. Assistance to franchisee

7. Marketing, management, advertising, store design, standards specifications

9. Product Distribution-Eg Produces the syrup concentrate Sells the syrup concentrate FRANCHISEE Produces the final drink Retail Stores Vending Machine Operators Restaurants & F&B Outlets

10. Business Format- Eg. Subway Outlet- Australia Subway Outlet- France

12. Established markets

13. Technical/management assistance

14. Standardized procedures

15. Quality standards

16. Selection of location

17. Facility design

19. High initial fees

20. High royalties and advertising allowances

21. Contractual restrictions

22. Inapplicable advertising

23. Termination clauses

24. Unsuitable products

26. Credible top management

27. Skilled field support staff

28. A trade identity

29. A proprietary operations manual

30. Effective training programs

31. Disclosure and offering documents

32. Plans for advertising, marketing, PR and promotion

33. A communications system

35. Lower capital requirements

36. Motivation – franchisors are owners of the franchise

37. Control of locations

39. Profit sharing

41. Enhancing business image

42. Ensuring consistent quality

43. Attaining higher productivity/better motivated staff

44. Access to good locations

45. Economies of scale