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Introduction to Franchising

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Introduction to Franchising
Introduction

Franchising is a method of doing business where a franchisor licenses trademarks and methods of doing business to a franchisee in exchange for a recurring royalty fee. Franchisor is the party who grant the franchise while franchisee is the one who purchase the right for franchise. This form of business has a tremendous growth in the last 50 years, started in United States in the 50s and then expanded to Europe. Nowadays, the rest of the world is beginning to implement the euphoria of franchising.

History of franchising

The concept of franchising actually has been applied for centuries. The Pope, in the medieval ages, assigned tax collectors in particular region to collect a certain amount that people earned from their job. In other cases, land lords gave the rights to the people to operate their business in return of rental fees. Although the form of business is different with franchising that we have today, the concept is still the same.

The modern franchising time began in United States after the World War II ended. Returning servicemen and women, with the coming of baby-boom era, had shaped the economy in United States and Europe growing in a rapid pace. The demand for products and services was really in high demand so that they need to find an ideal way to cope with the vast growth of people. This was the period where many franchising giants such as McDonald 's, Kentucky Fried Chicken and Wendy 's started to get bigger and bigger.

What is franchising

Franchising is a system for marketing goods or services. A franchisor grant a license to the franchisee to operate a business under the grantor 's name and system to market the grantor 's product and/or services for a specified period. The renewal regulation usually is subjected by the grantor or sometimes the franchisee also could specify about the duration of the contract, if the grantor accept the term of agreement.
Franchising is very appealing for franchisee because it gives

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