Francising is A continuing relationship in which a franchisor provides a licensed

privilege to the franchisee to do business and offers assistance in organizing,

training, merchandising, marketing and managing in return for a monetary
consideration. Franchising is a form of business by which the owner (franchisor) of a
product, service or method obtains distribution through affiliated dealers
(franchisees).

Advantages of franchising, franchise offers many other advantages that aren't available to the
entrepreneur starting a business from scratch. Perhaps the most significant is that you get a
proven system of operation and training in how to use it. New franchisees can avoid a lot of the
mistakes startup entrepreneurs typically make because the franchisor has already perfected
daily operations through trial and error.
Reputable franchisors conduct market research before selling a new outlet, so you'll feel greater
confidence that there's a demand for the product or service. The franchisor also provides you a
clear picture of the competition and how to differentiate yourself from them. Finally, franchisees
enjoy the benefit of strength in numbers. You'll gain from economics of scale in buying materials,
supplies and services, such as advertising, as well as in negotiating for locations and lease
terms. By comparison, independent operators have to negotiate on their own, usually getting less
favorable terms. Some suppliers won't deal with new businesses or will reject your business
because your account isn't big enough.

How to Franchise a business: Essentially, a franchisee pays an initial fee and ongoing royalties
to a franchisor like 4 percent to 10 percent of sales on average--for continued support and
training in advertising, marketing, sales, operational guidance, financial and human resources
consulting, and other services.
; in return, the franchisee gains the use of a trademark, ongoing support from the franchisor, and
the right to use the franchisor's system of doing business and sell its products or services. In
some cases, the fee may also cover additional services such as assistance with site selection.
2 examples of business that used franchising:
In US Coca cola: The actual production and distribution of Coca-Cola follows a franchising model.
The Coca-Cola Company only produces a syrup concentrate, which it sells to bottlers throughout the
world, who hold Coca-Cola franchises for one or more geographical areas. The bottlers produce the
final drink by mixing the syrup with filtered water and sweeteners, and then carbonate it before putting
it in cans and bottles, which the bottlers then sell and distribute to retail stores, vending machines,
restaurants and food service distributors.[43]
The Coca-Cola Company owns minority shares in some of its largest franchises, like Coca-Cola
Enterprises, Coca-Cola Amatil, Coca-Cola Hellenic Bottling Company (CCHBC) and Coca-Cola
FEMSA, but fully independent bottlers produce almost half of the volume sold in the world.
Independent bottlers are allowed to sweeten the drink according to local tastes. [44]

In Malaysia: In 1980s Marrybrown Family Restaurant became the first local fast food chain to
franchise its business system in Malaysia. This has allowed the fast food chain to grow at a
speedy rate while maintaining its service and food quality. Marrybrown is also one of the earliest
local franchises which expand their business overseas. It is said that their current oversea
business is more popular than the local business.

Marrybrown's success was followed by a few other local players who were starting to make it big
in the franchise business scene in Malaysia. E

http://www.skorcareer.com
http://www.entrepreneur.com
www.Wikipedia.com