Building 230, First Floor, Lane No. 11, Jafrabad, Near Ex-Taj Food, Delhi, 110053
New delhi, IN
Franchising is based on a marketing concept which can be adopted by an organization as a strategy for business expansion. Where implemented, a franchiser licenses its know-how, procedures, intellectual property, use of its business model, brand, and rights to sell its branded products and services to a franchise. In return, the franchisee pays certain fees and agrees to comply with certain obligations, typically set out in a Franchise Agreement. Three important payments are made to a franchisor: (a) a royalty for the trademark, (b) reimbursement for the training and advisory services given to the franchise, and (c) a percentage of the individual business unit's sales. These three fees may be combined in a single 'management' fee. A fee for "disclosure" is separate and is always a "front-end fee". A franchise usually lasts for a fixed time period (broken down into shorter periods, which each require renewal), and serves a specific territory or geographical area surrounding its location. One franchisee may manage several such locations. Agreements typically last from five to thirty years, with premature cancellations or terminations of most contracts bearing serious consequences for franchisees. A franchise is merely a temporary business investment involving renting or leasing an opportunity, not the purchase of a business for the purpose of ownership. It is classified as a wasting asset due to the finite term of the license. Franchise fees are on average 6.7% with an additional average marketing fee of 2%  However, not all franchise opportunities are the same and many franchise organizations are pioneering new models that challenge antiquated structures and redefine success for the organization as well as the franchise.