Franchising is a system of marketing goods and/or services and/or technology, which is based upon a close and ongoing collaboration between legally and financially separate and independent undertakings, the franchisor and its individual franchisees, whereby the franchisor grants its individual franchisee the right, and imposes the obligation, to conduct a business in accordance with the franchisor's concept.
The right entitles and compels the individual franchisee, in exchange for a direct or indirect financial consideration, to use the franchisor's trade name, and/or trade mark and /or service mark, know-how, business and technical methods, procedural system, and other industrial and /or intellectual property rights, supported by continuing provision of commercial and technical assistance, within the framework and for the term of a written franchise agreement, concluded between parties for this purpose.
The franchisee is an economic entity that operates on its own behalf and for its own account, but in doing so uses the trademark / service mark licensed to it and the business system of another economic entity, in exchange for an agreed fee.
From the viewpoint of a new entrepreneur, this model guarantees a safer business start and significantly increases the chances of survival in today’s highly turbulent marketplace. This is crucial in economies in transition, such as Serbia. While a franchise does not eliminate busines risks, it brings new entrepreneurs much higher chances of success. As many of those who choose to become entrepreneurs lack the necessary resources, personal qualities and knowledge, a vast majority of ventures will fold in the first three years of operation.
To reduce the risk of choosing a wrong franchise and to take the process of becoming an entrepreneur seriously, the buying of a franchise should be approached as a qualifying process, wherein the franchise best suited to a particular investor wins. To achieve this, each franchise should be treated absolutely equally, so that the information obtained could be qualified according to the same criterion to equalise the starting point of each business model and allow for a more impartial choice.
A franchise will certainly allow you to be your own boss, as you will have all necessary tools at your disposal; all it takes is your sincere desire and commitment. A franchise also offers much more than just independence. Even more important than future profit are a new mindset and new opportunities. The individual financial independence you will gain by purchasing a franchise provides a strong sense of certainty. This is a business system that allows those with limited financial resources to become independent, with an opportunity to increase their wealth in proportion to their effort, abilities and the amount of work they put in.