Business Models
Franchising
Also Known As Business Format Franchising
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Franchising is a business arrangement in which an established company, the franchisor, licenses its brand, operating methods and intellectual property to an independent operator, the franchisee, in exchange for fees and adherence to defined standards. It lets a business expand rapidly using the capital and labor of independent owner-operators rather than the franchisor's own funds. Modern franchising became a dominant American retail and restaurant expansion strategy after World War Two.
Facts
Core MechanismThe franchisor licenses its know-how, procedures, intellectual property and the right to sell its branded products or services to the franchisee, who pays fees and agrees to comply with operating standards in return. 1 Origin YearPemberton's 1886 licensing of Coca-Cola syrup is the article's clearest early successful franchise; the Singer Sewing Machine Company's 1850s program is noted as an earlier, ultimately unsuccessful attempt. Cross-Tradition Connections
Associated With
Franchising is defined by its own source article as involving the licensing of intellectual property and business-format knowhow, making it a specific commercial application of the licensing model rather than an unrelated concept.
McDonald's, built into a national and international chain after Ray Kroc's 1955 franchise agreement with the McDonald brothers, is business literature's single most commonly cited example of franchising.
Contains
Sources
1. Wikipedia, Franchising
WikipediaLead and History sectionsQuote, Lead and History sections
The boom in franchising did not take place until after World War II
1. Wikipedia, Franchising
WikipediaLead sectionQuote, Lead section
Franchising is a business practice where a company licenses its business model to another company.
1. Wikipedia, Franchising
WikipediaRegulation sectionQuote, Regulation section
business format franchises
1. Wikipedia, Franchising
WikipediaHistory sectionQuote, History section
In 1886, he concocted a beverage comprising sugar, molasses, spices, and cocaine. Pemberton licensed selected people to bottle and sell the drink, which was an early version of what is now known as Coca-Cola. His was one of the earliest and most successful franchising operations in the United States.
Wikipedia, McDonald's Corporation
WikipediaAssociated With: McDonald's Corporation, lead sectionView the Source Reader Challenges (0 open reader challenges)
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