What is a business franchise? franchise agreement. Franchise Terms

An increasing number of foreign expressions, phrases and words come into our everyday life. This is a natural phenomenon, because if a couple of years ago some term was not known to anyone, and now everyone is hearing it, then it turned out to be appropriate in the Russian lexicon and only occupied a free niche, displacing cumbersome and complex linguistic constructions. All this fully applies to the term franchise - "benefit", which we borrowed from French not so long ago, and now we are actively using it in domestic business. Indeed, many such foreign expressions are also found in the field of business relations, which reacts very quickly to changes in market conditions and is simply obliged by the nature of its activity to promote innovations to the masses.

Introduction

However, not all companies are guided by their own principles of doing business and building its hierarchy, for some it is much easier to follow the beaten path of network leaders, which provide ready-made management solutions. In simple terms, only renting a trademark and its products is practiced, borrowing all the complexities of the system. As a result, opening a franchise business is sometimes much easier than competing with small players. If earlier only a few resorted to such methods of doing business - advanced nouveau riches or experienced businessmen with experience in organizing international companies, now everything is different, and no one will be surprised by such a model. As a result, talk about business is everywhere. They compare the best-known examples of successful companies that have offered the market a universal or multicultural business model that has proven to be relevant in all corners of the world.

First application in practice

The most striking example, which is rightfully called the founder of franchising, is McDonald's. Overall, her success stories are the envy of many companies, but there are also some instructive moments. After all, the network owes its popularity not to the McDonald brothers, who organized the first fast food establishment, but to Ray Kroc, a modest businessman who previously sold equipment for making milkshakes. A significant meeting that turned the life of the whole society did not portend anything special. Ray Kroc went to have a bite to eat in a small establishment and was very surprised by the popularity of the system presented in it - fast and inexpensive food, delicious hamburgers with soft drinks were just the format that society with an eternal lack of time needed. After talking with the McDonald brothers, the businessman offered to sell their idea throughout the United States of America and concluded the world's first franchise agreement. Ray Kroc's personal funds were not enough to advance the cause, and he decided to mortgage his own house. After this fateful decision, events move very rapidly: now the McDonald's empire has more than 30,000 restaurants and is still gaining momentum, and the businessman is a billionaire.

Activity Data

Some interesting statistics about establishments that are found in all corners of the globe, and a 52-year-old businessman who entered into a franchise agreement with the brothers, whose name flaunts on the signs of these restaurants:

• In the 70s of the twentieth century in the United States of America, citizens spent at least 6 billion dollars annually on food at McDonald's. At the beginning of the twenty-first century, these values ​​\u200b\u200breached truly colossal figures - more than $ 110,000,000,000. These figures exceed the total spending on books, magazines, newspapers, music, videos, education, leisure, computers and software combined.
• The popularity of the restaurant is explained by the fact that it focuses on family values ​​and children's holidays that are understandable all over the world. After all, the image of a clown is so recognizable that only characters known for thousands of years, Santa Claus and Father Frost, can compete with him.
• At least 90% of new vacancies that are freely available on the US market are provided by this well-known network. Every eighth person worked at McDonald's.
• The restaurant chain's advertising spend is in the millions and remains one of the highest in the world.
• Starting a McDonald's franchise business is not as easy as it used to be, but with $300,000 for the minimum down payment, it can be done.

What did Ray Kroc do?

The businessman did not invent something new or make changes to the existing principle of customer service in fast food establishments. He only took the ideally established system of doing business from the MacDonald brothers and rented it to later sell it to other interested parties. All restaurant recipes, cooking features, prompt customer service, staff training principles and the necessary equipment were carefully studied and applied with the greatest efficiency in megacities, where they turned out to be more relevant than ever.

Comparison with Subway

To finally understand what a franchise is in business, it is worth considering the principles of its functioning using real examples. Let's stop our choice on the nearest competitors of the company "McDonald's" - Subway. They came closest to the power of the founding corporation of fast food chains.