Franchising
Franchising is an extremely popular form of retail service distribution covering a wide variety of consumer and business-to-business services. A franchise is a contractual agreement between the originator of the service concept (the franchiser) and an individual or organization that provides retail distribution for the service (the franchisee). It works particularly well when the service can be standardized across disparate geographic locations. Elements of a typical franchise agreement are:
the nature of the service to be supplied by the franchiser
the geographic territory within which the franchisee can market the service
the percentage of the revenue generated by the franchisee that must be paid to the
franchiser
the length of the agreement
the up-front fee paid by the franchisee to the franchiser
the terms by which the franchisee agrees to operate and deliver the service
an agreement by the franchisee not to sell another company's services
the promotional support provided by the franchiser to help develop the franchisee's market
the administrative and technical support provided by the franchiser
the conditions under which the agreement can be terminated.
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