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Corporations must take certain issues into perspective earlier than franchising an organization. In exchange, the franchisee often pays the franchisor a one-time initial charge (the franchise fee) and a unbroken charge (referred to as a royalty) for the use of the franchisor’s trade name and operating methods. The franchisee is answerable for the day-to-day management of its independently owned business and advantages or dangers loss primarily based on his personal efficiency and capabilities.

Each social gathering to a franchise has a number of interests to protect. The franchisor is involved in securing protection for the trademark, controlling the enterprise idea and securing know-how The franchisee is obligated to hold out the companies for which the trademark has been made outstanding or well-known. There is a great deal of standardization required. The place of service has to bear the franchisor’s indicators, logos and trademark in a distinguished place. The uniforms worn by the employees of the franchisee should be of a particular design and coloration. The service must be in accordance with the sample followed by the franchisor in the successful franchise operations. Thus, franchisees aren’t in full control of the enterprise, as they might be in retailing.

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