Business format franchising

Business format franchising

There are some essential things licensee has to take care of before getting into work. In addition to the right to sell commodities or offering Business format franchising services, he has to take care of the licenser’s designs, good controlling and accounting system, project planning, advertising and promotions determination, practicing, and if his business was through hotels or tourism agencies, he has to be introduced to reservation methods that would cover the whole world.

licensing had gained a great popularity in the last few years in the UK. The share of the licensed business in economy had jumped from $5 billion to $12.4 billion in the last year. Well, that highlighted the importance of licensing in the economy of the UK.

licensing is thought to be a settlement; whereas a franchising company gives a person or a group the right to sell their commodities or services. But truly licensing is a complex task, and there is also variety of licensing settlements.

licensing can be classified into four main groups.

Business format franchising Manufacturing licenses

In this settlement the franchisor allows the licensee to use his logo and trademark on the company’s commodities that they have manufactured. This type is always used in food and drinks products. A premium fund should be given to the licensing company, in addition to share of every profit achieved by the licensee, if that was mentioned in their deal.

Business license Ventures

In the business license venture licensee sells and distributes commodities for the licensing company. The franchisor guides the customers to the licensee and doesn’t interfere in their dealings. An example for the business license venture is the vending machines that are available in the public places. The franchising vending machines are bought by the licensee, and they take share of the franchising sales.

Business format franchising Product

The licensing company in this type of license, the settlement deals with distributing the products. The franchisor allows the licensee to use the logo of their products. In product licenses, the license will either pay a toll, or will buy a minimum quantity of shares to purchase.

Business Format licenses

The business format licenses is supposed to be a quite complicated license, that overwhelms a big number of deals between the license and the licensee. The licensee shares in the production affairs that comprise the commodities and the logo. licensees are given training by the licenses. The most famous example for business format licenses is fast food licenses.