Business Format Franchising and Brand Power

Franchising is a specific method of distributing goods and services which has been around in many forms since man first began to engage in commercial enterprise. It has evolved from a simple grant of a right or privilege in the middle ages to the sophisticated business format franchising methodology we see today.

Business format franchising not only grants the right to use the name and sell the products or services of the franchisor, but it also involves the transfer of the complete way of doing business that has been developed by the franchisor. Specifically, the franchisor transfers all its operating systems, technical expertise, marketing, training, management methodologies and essentially all relevant information necessary for the new franchisee to emulate to be successful. The franchisor also trains the new franchisee extensively up front and provides ongoing training and support throughout the life of the franchise agreement.

Business format franchising is what franchising is all about today and is essentially why franchising has been and remains the most successful method of distributing goods and services in our economic history.

McDonald’s best epitomizes the incredible power of franchising. Over time McDonald’s learned how to absolutely maximize the sales potential of a fast food outlet. Their concept is highly systemized. There is a McDonald’s way for everything.

Franchising is really a balance of the collective interest of two separate parties, the franchisor who wants to build the business and brand name, and the franchisee who is willing to spend his/her own money to be a part of a system that is heading for great success.

A well established brand is a very powerful mechanism in the market place. Along with the brand comes the great experience of the franchisor that has optimized the business process over the years. The franchisee also benefits from the tremendous support and training continuously provided by corporate Brand name recognition is very powerful. When you hear the words "ACE Hardware", does that not mean something to you? How about "Meineke", "TGI Friday’s" or "Johnny Rockets"

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