Standard franchise franchising. Main types of franchises. The franchise package must include

Opening your own business is not as difficult as it might seem at first glance. If you don't have good ideas for doing business is not a problem; today it is possible to legally use other people’s ideas and business models to make money.

Franchising can be applied in a variety of business areas: manufacturing, trade, services, banking and insurance, etc.

Franchising classifications;
Types of franchises according to the format of interaction between the franchisor and franchisee;
Types of franchises by type entrepreneurial activity;
Summary.

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What types of franchising are there?

The success of this form of business led to the fact that the most different types franchising. Before purchasing one or another franchise, it is worth studying the features of each of them in order to be prepared for the format in which you will have to work. There are several classifications of franchise systems. According to the degree of freedom of doing business, there are the following types of franchises:

Standard or classic;
Free;
Turnkey business;
Business for rent;
Master Franchise;
Corporate.

According to the format of the enterprise being created and the type of activity, the classification of types of franchising is as follows:

Trade franchising;
Service;
Industrial;
Mixed.

Let's take a closer look at the types of franchising with examples to understand what advantages and disadvantages each of them has.

Standard or classic franchise

This form refers to the main types of franchising and provides for the payment of a lump sum fee (payment for the purchase of a business model) and regular royalty payments. At the same time, the franchisor strictly controls the activities of the franchisee.

For example, if we're talking about about trade, then representatives of the franchisor regularly check the appearance of the outlet, display of goods, staff training and much more. In addition, the franchisor sets the size trade margin and controls the turnover of the point. This format is not very common in Russia, since domestic businessmen prefer to have more freedom in doing business.

Free franchise

This type of franchise is more attractive for Russian entrepreneurs and, accordingly, more widespread in Russia, as well as in the CIS countries. Within this model, the entrepreneur receives more freedom when making certain decisions, and the leadership role of the franchisor is reduced to a minimum. As well as the size of the corresponding payments (royalties, lump sum and so on.).

Turnkey business

This model assumes that the franchisor completely creates a branch of his organization and transfers it to the franchisee, reserving the right to receive part of the profit from its work. This format of cooperation is extremely rare in Russia.

Business for rent

The essence of this type of franchising system is that the brand owner, as in the previous case, creates a branch of his company, but does not transfer ownership of it to the franchisee. The outlet is rented out, and the entrepreneur manages it with the possibility of receiving a certain percentage of the profit.

Master franchise

A master franchise is the right to do business under the wing of a franchisor in a certain region. The franchisee receives the right to work in the region individually, opening new branches independently, or transferring the franchise further, thereby helping the sub-franchisee start a business.

Corporate franchise

A corporate franchise is a type of franchising that implies fairly little freedom for the franchisee to make certain decisions. Ownership of the assets belongs to the franchisor, who also controls the process of doing business. In addition, such interaction often includes a prohibition on terminating the contract with the franchisor and the impossibility of creating own business in the same place, but under a different brand.

Types of franchises by type of activity

Trade franchising;

In trade franchising, the brand owner transfers to the entrepreneur the right to use his name, his sales methods, and sell his product. Representatives of the franchisor help the businessman decorate the outlet in accordance with the corporate style and provide staff unified form, and the store itself with appropriate equipment. This type of franchising is easier to master and organize, which is why it is much more widespread than other forms.

A striking example of trade franchising can be stores of such brands as: Felix, Positronics, Columbia and others. They help franchisees set up a retail outlet, organize a business and arrange supplies of goods. Franchisors often promise that they will start receiving operational profits within three months after the store is launched.

Service franchising

Service franchising is somewhat more complicated than trade franchising, since it is not enough to simply design an outlet in a certain style. The franchisor transfers not only the right to use the trademark, but also technologies, procedures and techniques for providing certain services. In addition, this type of franchising is often associated with providing franchisees with specialized software products, special literature and information.

This model is less common in practice, since the franchisor must provide detailed rules and procedures in accordance with which each of the branches will have to operate. And the entrepreneurs themselves need to be trained and monitored to ensure compliance with the established methodology. In addition, in Russia, service franchising is less developed than in the West also because the population uses it much less often. various types services.

Manufacturing franchising

Here we are talking about the transfer of a certain technology for the production of a product in demand among the population. This could be baking Ossetian pies or making furniture. The franchisee will have the right to manufacture the same product as the franchisor, use a well-known brand to label it, and also sell manufactured products. This also transmits corporate style, marketing and trading strategies.

This type of franchising is quite rare; more often companies acquire a license to manufacture a particular product under famous brand.

Mixed type

This option combines elements of each of the above types. The most common type is a mixed type, which includes trade and service franchising. This happens when the franchisor is a manufacturer selling its products through a network of franchisees who, in addition to sales, also provide customer service. An example would be a network beauty salons opened by a cosmetics manufacturer. As a result, franchisees will provide services to customers using the manufacturer’s product, while selling it.

Summary

Franchising has a number of advantages for both brand owners and entrepreneurs buying a franchise. The first ones discover new points of sale for their products, while making a minimum of effort to expand trading network. The latter get the opportunity to work under a well-known brand, spending much less time and money on advertising and promotion. At the same time, you can open a business without having to come up with something original in order to beat your competitors.

Each entrepreneur chooses which type of franchise to use for himself, including based on personal qualities, connections and capabilities. Some are ready to organize production, while others prefer fast and simple trading. What type of franchise would you choose? Write about it in the comments.

Franchising can be very different. When looking for an area in which to open your own business using this scheme, you need to carefully choose, because the types of franchises are varied and numerous. There is a classification based on the nature of the relationship between the franchisor and franchisee, and by type of activity. You need to understand the features of each option - this will help you choose the best option to run your business.

Separation according to the nature of the relationship

This classification is also called division according to the degree of freedom of doing business.

The following options exist:

Classical.
Free.
Full construction.
For rent.
Master Franchise.
Corporate.
Import-substituting
Bank

Classical

It is standard and the most popular. The main features are payment for the purchase of a business model, regular payment of royalties. The franchisor controls the activity process quite tightly. In addition, the franchisee receives rights to the trademark and is required to periodically provide reports. This type is convenient for a novice businessman and consumer. The latter is guaranteed to receive the expected quality.

Important! The franchisor strictly controls compliance with standards. In the case of a retail outlet, regular checks of the condition and appearance of the equipment, display of goods, appearance personnel, etc.

Free

In this case, everything is simpler. The entrepreneur gets the opportunity to make decisions independently. Payments - royalties and push fees - are minimal. The franchisor interferes little in business and does not exercise strict control. This is precisely why this model has become popular in the CIS.

With all this, the franchisee has the right:

Use a trademark.
Receive free consultations, education.
Have discounts when purchasing goods/raw materials.

In essence, this scheme is similar to a dealership, but with certain advantages.

Full construction

This type is also called a silver franchise. It’s clear why, because the franchisee already has at his disposal ready business for a certain amount. The franchisor company creates a branch of the organization under its own brand and sells it. At the same time, he retains the right to receive a portion of the profit. In the future, it does not interfere with the functioning.

For rent

As in the previous case, the franchisor takes care of all organizational issues, also creating a branch of the company in accordance with all corporate requirements and rules. But the transfer of ownership rights to the entrepreneur does not occur - he manages the point and conducts business. For this he receives a percentage of the profit. This type is characterized by restrictions on the actions of the franchisee; he, in fact, is not an individual entrepreneur, but simply a manager.

Master franchise

This franchising option is also called golden. It provides for the purchase of rights to develop a trademark within one region under the control of the franchisor. In this case, the entrepreneur receives the following rights:

Work alone in the region.
Open new branches independently.
Help subfranchisees start a business - that is, transfer the franchise further.

Corporate

In this case, the freedom of action and decision-making of the franchisee is very limited. The franchisor owns the assets and controls the conduct of the business. Special note in similar agreements– a ban on terminating and creating a business under your own brand in the same place.

Import-substituting

It implies the production of imported goods, but under a domestic brand. This idea is not new; it was successfully used in the 90s, albeit illegally. They took the business idea, changed the name and started working. And such a scheme was and remains successful, but now in a legal field.

Bank

Involves working as a franchise in the banking sector. This type of business is popular and in demand. But not all banks sell franchises by region, at least they do it reluctantly. Therefore, there is a queue for the right to such a franchise.

Classification by type of activity

There are the following types of franchises by type of activity:

Trading. The franchisor transfers the brand, sales methodology, and the actual product for sale to the entrepreneur. Support and control of TT design is carried out in accordance with the corporate style. The staff is provided with uniforms, the store with equipment. With this approach, it is possible to make a profit within 3 months after opening the store.
Service. This type is more complicated, because it is necessary not only to properly design the point of service provision, but also to comply with standards. At the same time, the franchisor provides the necessary training to the entrepreneur so that he can maintain control over compliance with the level of service. This type of franchise is less developed, because the franchisor needs to create a scheme, rules, procedures by which the entrepreneur will work to achieve the expected result.
Production. IN in this case There is a sale of production technology, the right to use the brand and sell the manufactured product. It is important to comply with the corporate style, marketing strategy. This type is not widely used because it is cheaper to buy a license to produce a product.
Mixed. This option is convenient and popular. It implies a combination of the above types. That is, the franchisee manufactures the product, sells it according to the franchisor’s scheme, and at the same time provides services also under the franchise. The simplest example is the production of cosmetics, its sale in a company salon and the provision of cosmetic services using the products produced.

Franchisor know-how

In this classification, there are 2 options - franchising product distribution and business format. In the first case, the entrepreneur receives the right to sell goods or provide services under the franchisor's trademark. This option is more convenient, first of all, for the licensee’s company, because it turns out to expand the market and make trademark recognizable and in demand.

As for the business format, this is the next stage in the development of the franchisor’s company. After all, now entrepreneurs who want to buy a business are given not only the right to operate under a trademark, but also a whole business concept, right down to registration trading floors, staff uniforms, sales standards, service provision. That is, know-how is transferred to the franchisee in the format of a ready-made business concept.

Conclusion

Franchising of one type or another is very different. You can buy the right to work using a trademark and pay less. Can i ready-made system turnkey, which will provide almost 100% income. In this case, you will have to endure careful control from the franchisor.

ADVERTISING

A clothing store franchise is a business option that can bring substantial income. Of course, in order for customers to go shopping in a store, they need to be offered something very attractive. Considering the current economic situation, these are affordable prices and quality goods. On this moment only…

The franchise business appeared as a response to the need to develop the market that arises for any successful company. To achieve maximum profit, you need to be able to promote the product and make the brand popular. This can be achieved using effective tools stimulating numerous entrepreneurs who are ready to dive into the world of business, but do not know where to start. A franchise business involves partnerships, for which the head office initially sets the conditions, and others are forced to obey them. Franchising is currently a fairly broad concept that involves several types of cooperation mechanisms. They are united by the fact that they meet modern requirements market relations and are aimed at mutually beneficial interaction.

Partnership for mutual benefit

As can be seen from standard contract franchises, such interaction allows a novice entrepreneur to master the intricacies and intricacies of the chosen field of business, as well as a specific product, without investing too much money and effort into it. The head office, by providing a franchise, at the same time provides all the tools and access to extensive information on the basis of which the enterprise can function effectively from the very beginning. Many agreements also stipulate that it is the franchisor who selects personnel for the initial stage of operation of the new branch.

An enterprise operating under a production franchise can assess with minimal risks how productive, promising and profitable the area of interest is. As a rule, you need to pay an entry fee and spend a certain amount on the primary equipment of the workspace, but these expenses are much less than if you start a business from scratch. Nowadays it is a simple and effective way to enter the business.

Product franchise

As can be seen from the reviews of the franchise, this option (according to many entrepreneurs) is one of the most profitable. An alternative name is distribution franchising. The work process involves relationships through the product.

Franchise operating conditions in this case presuppose the presence of a manufacturer providing specific entrepreneur the opportunity to work with its products. In this case, the enterprise must use the original brand and comply with the rules of the game established by it. As can be seen from reviews of franchises, this logic is quite simple to work with, which is largely due to the large amount of accumulated information about successful strategies.

Historical background

Franchises have been known since the nineteenth century. American entrepreneurs were pioneers in this area. At that time they had just begun to produce sewing machines"Singer", and the manufacturer granted several companies the right to sell their goods in a strictly agreed upon territory. In this case, a mandatory condition was to preserve the name of the manufacturer. In addition, this type of franchise involved product servicing provided by sellers. For Singer, this approach to business allowed it to expand its sales geography and achieve worldwide fame.

Over time, profitable franchises began to appear on the business market more and more often. For example, the experience of the Despar grocery union is indicative. It brought together suppliers and sellers of agricultural goods in Germany in the first half of the twentieth century. As practice has shown, profitable franchises require a careful approach to developing a store concept, access to which can then be sold. Using the concept was beneficial for both parties: both the authors and those who joined the franchise.

Everything flows, everything changes...

Modern types of franchises are quite different from those transactions that were concluded two centuries ago, but at the same time the essence of cooperation remains the same. There is a manufacturer who has the rights to the product, and there is an entrepreneur who wants to work with this product. Product franchising involves working under the guise of a manufacturer, using its reputation and starting your own business with minimal investment.

What is a franchise in simple words? This is a transaction in which the entrepreneur receives from the supplier an assortment matrix, a store concept, a product, and often also personnel for the first time of work. The entrepreneur is obliged to work under the trademark that provided the franchise. What is (in simple words) doing business according to this scheme? Most often - the sale of clothing, food, shoes.

Terms and Conditions

Franchises for small businesses provide an opportunity to become part of large holding with minimal investment. At the same time, the manufacturer increases its name recognition, as well as the volume of transactions concluded, which leads to financial prosperity. Many companies require their partners to keep transaction volumes at a minimum level, and if this amount is exceeded, they give bonuses and make lucrative offers. As a rule, franchises for small and medium-sized businesses assume that the entrepreneur adheres to the standards, rules of service, and the level established by the head office. If corporate ethics is not observed and the level of service is low, you can easily lose the privilege to work under a well-known name.

Thanks quite tough, but favorable conditions cooperation franchises for small towns without investment become a way to access entrepreneurial sphere for those who have a desire, but do not have large financial reserves and special education. The product offered through franchising is well recognized by customers, which means that an influx of customers is ensured only due to the advertised brand, without any effort on the part of the franchise buyer himself. At the same time, the owner of a pharmacy, clothing, and food franchise receives high-quality goods within a strictly specified time frame and at a favorable price. The supplier and the seller are all interested in the profitability of the enterprise, which encourages them to work together, efficiently, and productively.

Alternative option

In many cities in Lately Bakeries and confectioneries literally spring up like mushrooms after the rain. Many of them are also franchised. The manufacturer allows the company to operate under its recognizable name, provides baking products, production capacity and a streamlined, well-thought-out implementation scheme to attract clients. The entrepreneur, paying the amount due under the contract, must simply maintain the point in working order.

As can be seen from the described scheme, the company daily sends semi-finished products to the bakery, from which the staff makes buns and cakes so desired by customers. Since the place operates under a well-known name, potential client does not doubt the quality of the product and boldly goes to spend money, even if the price of (for example) bread is higher than in the supermarket.

Goods and services

Using the scheme described above, you can buy a franchise of a pharmacy, clothing store, confectionery or even a restaurant. But not everyone wants to work with a product, so franchising provides the opportunity to provide services according to a similar scheme. Service franchise also sometimes called business franchising. The partners enter into a deal regarding the intellectual property of the head office. In this case, it is assumed that the supplier has some licenses that allow him to work in the selected category, and the right to use these licenses is transferred under a franchise agreement.

Service franchises are presented in abundance on the Internet - these are a variety of sites. Beauty salons and fitness rooms work according to a similar logic. Some concepts assume that the franchise buyer is only looking for a client, and the services are provided almost entirely by the head office. This scheme is common among medical enterprises, especially laboratories. The entrepreneur opens a service point where he receives biological material from the client, sends it to the research area of the head office, and then transfers the received data to the client.

Terminology and differences

It is not always possible to immediately figure out whether a franchise belongs to the product or service category. Much depends on the specifics of a particular zone and on the rules that the head office introduces for cooperation. Many build franchising using a mixed interaction model. A classic example is restaurants. fast food McDonald's. By purchasing a franchise, an entrepreneur gets not only access to the brand, but also to the processes taking place within the company. Semi-finished products are supplied for the dishes, the head office trains staff, provides unique technologies for manufacturing the product and offers a number of other specific advantages. The partner who has acquired the franchise must be involved in maintaining the image, attracting buyers, selling goods, and servicing the client directly sitting at the table. In fact, we are talking about both product and service cooperation.

However, the concept in question is much broader than it seems at first glance. There is also a conditional and unconditional franchise. This terminology is not even used in building your own business, but in the insurance field. A certain scheme for paying compensation in the event of an insured event is assumed. The gratuitous payment is paid under the contract in a set amount, and the conditional one depends on the specifics of the situation that occurred.

Classification: why is it needed?

The described division of the franchise system into several groups makes it easier for a potential businessman to master this area of mutually beneficial relations between companies. There are a huge number of franchising assumptions in the modern market, and the pitfalls and features of a particular transaction are not always visible at first glance. On the other hand, only the right choice can be the key to successful business. This means that you need to carefully study both the franchise classification system and determine which option is optimal in a particular case.

It is important to remember that business concepts for different franchise classes are quite different in nature. At the same time, the idea is the same for everything - there is a certain head office whose brand should be promoted, and there is a novice entrepreneur who is not ready to create a business from scratch. In exchange for financial benefits, he is given all the opportunities to create a business under an already well-known name, that is, one that exactly matches the wishes and requirements of clients. When accessing intellectual property through a franchise, it is important to evaluate how valuable the information is and whether it is worth working with. Often, franchising offers look very attractive, but in practice they are much less profitable than advertised. The quality of the initial concept determines the success of a businessman.

On Russian market There is also the following division of relations in the field of franchising:

sales;
service;
production

Service and franchise

Having decided to enter such a business, the entrepreneur receives from the franchise seller all the necessary information on the chosen area. This is often how real estate agencies are opened, with the head office running common base, one for several regions, and individual offices receive unlimited access to it for an agreed amount. The main task is to find a client and keep the information in the database up to date.

Franchising is quite widespread in the field of car rental and the provision of cleaning, loading, unloading, and moving services. The ability to use the head office is combined with access to a well-promoted brand, which makes getting into the business simple and straightforward.

Production and franchise

Behind a certain amount stipulated in the contract, the entrepreneur receives from the head office all equipment, personnel and opportunities for setting up his own production process. Instructions for using the machines and training personnel are included. The head office conducts trainings, thanks to which a novice entrepreneur can immediately create high-quality products that meet current standards and buyer expectations.

For the head office, this type of franchise is one of the most convenient. The company is only engaged in providing information and machines, but the work itself falls entirely on the one who purchases the franchise. At minimum costs and investments there is an opportunity to maximize profits.

Sales and franchise

In this type of cooperation, the head office takes on numerous functions - it provides the entrepreneur entering the network with necessary equipment, often staff and retail space, and also produces all the necessary goods himself. The task of an entrepreneur who has acquired a franchise is to find a client and sell the product, serving the buyer at the highest level. This option is more difficult for the franchisee, but easier for those who are just starting their first business.

Where to start?

When choosing the best franchise for yourself, it is important to analyze several factors. First of all, you need to understand how much money a novice entrepreneur is willing to invest in the business, and also figure out which of the work schemes described above is most suitable. Currently, on the virtual web there are many directories of enterprises from which you can buy a franchise. Knowing the area in which potential buyer franchising is guided best, and also by imagining under what conditions it will be more convenient to work, you can choose the best option for yourself.

Most often, franchising opens stores selling clothing, shoes, as well as ice cream shops, grocery stores and pastry shops. And yet, it’s worth trying yourself in what you’re passionate about, even if it’s a non-classical area for franchising. It is important to assess the level of competition, as well as the availability of suitable space in your city. If a business is started in small town, where there are already representatives, for example, of fast food restaurants, a similar a store is unlikely to lead to success. Please note: some enterprises set restrictions (for example, no more than one point of sale, store, restaurant per locality).

04.04.2015

Starting an independent business from scratch is always difficult, especially if there is no idea of the first steps, the course of development, possible problems on the way to success. If aspiring entrepreneurs are constantly looking for their place in consumer market, then large producers of goods and services are constantly searching for new spheres of influence and markets. By natural process became the unification of these two directions moving towards each other. To unite common interests A method of entrepreneurship called franchising was founded in a profit-generating enterprise.

In our country, this type of relationship between large companies owning brands and small businesses has received a legislative basis in the form of a commercial concession agreement. Historically, the owner of a brand who rents out his name, production technology and secrets of success is called a franchisor, and an entrepreneur who uses someone else’s name is called a franchisee. Open franchise business - means having the opportunity to use a trademark, the rights and authority of a company, technology and secret commercial information a large well-known company.

All types franchise business are similar in one thing: there are two parties involved. One is a large, authoritative, successful company, interested in spreading their brand, the second is a small business, ready to start their own, but afraid of the risks associated with inexperience.

In the process of cooperation, one party receives a stable profit in the form of a percentage that the franchise brings . Franchise business, in turn, has the opportunity to develop, relying on the experience of a large company. In exchange for a monthly payment of a percentage of the company's income, the franchisee receives a business that does not require advertising on its part. In addition, the franchisor can act as a guarantor for a business development loan.

Before choosing the right franchise for your startup, it’s worth understanding what they are. There are three main directions in franchising:

· Product franchising. This is one of the easiest and least expensive ways to start your own business. It involves the sale of certain products of a large manufacturer under a concession agreement. Product franchising is most often found in the field of trade household appliances, cosmetics, clothes, shoes, etc.

· Manufacturing franchising. Second most common among novice entrepreneurs. In this case, the franchisee buys the right to produce goods using equipment and technology patented and owned by the franchisor. At the same time, the owner of the brand carefully monitors the quality of the output product, because his reputation depends on it. The franchisor provides the ward with equipment (under a rental, sale or leasing agreement) and raw materials. Examples include franchisors such as Fanta, Coca-Cola, Pepsi, etc.

· Franchising in the service sector. In this case, the franchisee acquires the right to carry out some type of activity to meet the client’s needs. Examples of this type of brand rental include beauty salons, travel companies, restaurants and coffee shops. The franchise extends to a whole set of patented rights. For its part, the tenant undertakes to maintain a uniform design of the premises, style and quality of customer service.

For those who want to have their own business, but are not ready to start on their own, a franchise gives them a chance not only to make a profit, but also to gain enormous comprehensive experience.