Franchise
Types of Franchising
There are three basic types of franchise;
1. Trade name franchise
Trade name franchise involves a brand name such as True Value Hardware or Western Auto. Here, the franchisee purchases the right to become identified with the franchisers trade name without distributing particular products exclusively under the manufacturers name. 2. Product distribution franchise
A Product distribution franchise licenses the franchisee to sell specific products under the manufacturers brand name and trademark through a selective, limited distribution network. This system is commonly used to market automobiles (Chevrolet, Oldsmobile, Chrysler) gasoline products (Exxon, Sunoco, Texaco), soft drinks (Pepsi Cola, Coca-Cola), bicycles (Schwimm), appliances, cosmetics, and other products.
These two distribution systems allow franchisees to acquire some of the parent companys identity. Franchisees concentrate on the franchisers product line, although not necessarily exclusively. Since 1972, the number of product and trade name franchises has declined rapidly because of intense competition and general economic conditions. But the sales of these two franchise systems have climbed steadily since 1972.
3. Pure franchise
A Pure (or comprehensive or business format) franchise provides the franchisee with a complete business format, including a license for a trade name, the products or services to be sold, the physical plant, the methods of operation, a marketing strategy plan, a quality control process, a two-day communications system, and the necessary business services. That is, the franchisee purchases the right to use all the elements of a fully integrated business operation. A Pure franchise is the most rapidly growing of all types of franchise and is common among fast-food restaurants, lodging establishment, business service firms, car rental agencies, educational institutions, beauty aid retailers, and other promising growth industries.
There are three basic types of franchise;
1. Trade name franchise
Trade name franchise involves a brand name such as True Value Hardware or Western Auto. Here, the franchisee purchases the right to become identified with the franchisers trade name without distributing particular products exclusively under the manufacturers name. 2. Product distribution franchise
A Product distribution franchise licenses the franchisee to sell specific products under the manufacturers brand name and trademark through a selective, limited distribution network. This system is commonly used to market automobiles (Chevrolet, Oldsmobile, Chrysler) gasoline products (Exxon, Sunoco, Texaco), soft drinks (Pepsi Cola, Coca-Cola), bicycles (Schwimm), appliances, cosmetics, and other products.
These two distribution systems allow franchisees to acquire some of the parent companys identity. Franchisees concentrate on the franchisers product line, although not necessarily exclusively. Since 1972, the number of product and trade name franchises has declined rapidly because of intense competition and general economic conditions. But the sales of these two franchise systems have climbed steadily since 1972.
3. Pure franchise
A Pure (or comprehensive or business format) franchise provides the franchisee with a complete business format, including a license for a trade name, the products or services to be sold, the physical plant, the methods of operation, a marketing strategy plan, a quality control process, a two-day communications system, and the necessary business services. That is, the franchisee purchases the right to use all the elements of a fully integrated business operation. A Pure franchise is the most rapidly growing of all types of franchise and is common among fast-food restaurants, lodging establishment, business service firms, car rental agencies, educational institutions, beauty aid retailers, and other promising growth industries.
Links: http://www.franchiseconsulting.net.au/Franchise-articles/Franchise-articles/3-Basic-types-of-a-Franchise.asp