Franchising

What is a franchise? A franchise is an authority that is given by an organization to someone, allowing them to sell its goods or services or to take part in an activity which the organization controls.

How it is a franchise formed? In franchising, a franchisor grants a licensed privilege to a franchisee to conduct business and provides assistance in organizing, merchandising, marketing, managing, and training in exchange for a monetary consideration. Essentially, the franchisee is required to pay an initial fee and ongoing royalty fees to the franchisor. In return, it gains the right to use the franchisor's trademark, implement its operation system, and sell its products or services, as well as access to ongoing support.

PRIVATE OR PUBLIC? private

Who is the ultimate authority? The franchisor is the ultimate authority in franchising. This person is the owner of the business model however, a franchisee is someone who pays the franchisor an initial franchise fee for the right to operate their business under the franchisor’s name, using the franchisors business model.

How are decisions made? Only the franchisor can make business decisions however, the franchisee can suggest to the franchisor changes he/she wishes to be made

ADVANTAGES Of a franchise Operating under a known business This gives the franchisee an upper hand since operating techniques and traits were already established and can be implemented at the new location A known brand This will reduce the workload for the franchisee since the brand is already know and trusted by the market

ADVANTAGES Of a franchise Financing Acquiring business finances is easier since investors will be more willing to invest in an already established business. Support and security The franchisors may often offer training and support with managing accounts, sales and advertising.

disadvantages Of a franchise Decisions can only be made by the franchisor Franchise agreements dictate how the franchisee can run the business There are restrictions on where you operate (who are your suppliers) Bad reputations by other franchisees may affect your reputation Franchisors don’t have to renew the franchise agreement after the term has ended.

EXAMPLES OF FRANCHISES IN TRINIDAD AND TOBAGO