A franchised store is a commercial enterprise that operates under the name and trademark of an established brand, by virtue of a franchise agreement with the latter.
The franchisee thus benefits from the brand’s reputation, know-how and tools for running its business.
The franchise model involves an independent individual, called a franchisee, who owns and operates a business while operating under the name and brand of an established company, called a franchisor.
What is a franchised store?
How does it work?
What are the advantages? Explanations.
How does a franchised store work?
The operation of a franchised store is based on a partnership between the franchisor and the franchisee, bound by a franchise agreement that defines the rights and obligations of each party.
Each party has clearly defined roles and responsibilities.
The franchisor, as initiator of the commercial concept, holds the rights to the brand, the know-how and the tools required for the business.
The franchisor provides the franchisee with everything he or she needs to operate the store under the franchisor’s name.
This includes the right to use the franchisor’s brand, logo, products and sales methods, as well as technical and commercial assistance, including initial and ongoing training.
In return, the franchisee, as an independent entrepreneur, makes a financial contribution and manages the day-to-day business of the franchised store. They pay regular royalties to the franchisor, generally in the form of a percentage of sales. These contribute to maintaining the support and services provided by the franchisor, such as training, ongoing assistance and access to a mutual assistance network between franchisees. Efficient operation of a franchised store is therefore based on compliance with the concept and rules laid down by the franchisor, participation in training courses and rigorous management of the business in line with the quality and presentation standards defined by the franchise network.
Opening a franchised store: what are the advantages?
The advantages of this business model are many and varied.
Firstly, by joining a franchise network, you instantly benefit from the franchisor’s brand awareness and established customer base, giving you a significant competitive edge.
What’s more, franchisors offer full support and training for franchisees, which is essential for entrepreneurs new to the world of franchising.
You have access to a proven business concept, avoiding the risks and costs associated with developing your own business idea.
As a franchisee, you benefit from the brand’s network of suppliers, enabling you to obtain advantageous prices.
What’s more, the resources, tools and ongoing support provided by the franchisor help you to manage your business effectively and maximize your profits.
Finally, the potential for growth by opening several outlets offers an opportunity to increase your revenues and net worth.
Being a franchisee combines the autonomy of being your own boss with the benefits and security of belonging to an established, successful network.
What you need to know before opening a franchise business
Opening a franchise store requires a good understanding of the different types of franchise businesses available.
These include product franchises, where the franchisee sells the franchisor’s products; service franchises, which offer services under the franchisor’s banner; and distribution franchises, which combine the sale of the franchisor’s products with the franchisee’s own products.
There are also mixed commercial enterprises, combining these different aspects.
The franchisee ‘s obligations are manifold: compliance with the franchisor’s concept and rules, participation in training courses, management in line with quality standards and payment of royalties.
For the franchisor, the benefits include rapid expansion of the network, increased brand awareness, income from royalties and entry fees, and greater control over the quality of products and services. Before committing to a franchise business, it’s advisable to find out all you can about the franchisor, the business concept and the target market, check that it matches your skills and interests, read the franchise contract carefully and compare different opportunities before making a decision.
