There are three basic types of franchises:
Product Franchises.
Manufacturers use the product franchise to govern how a retailer
distributes their product. The manufacturer grants a franchisee the
authority to distribute goods by the manufacturer and allows the
owner to use the name and trademark owned by the manufacturer. The
franchisee must pay a fee or purchase a minimum inventory of stock
in return for these rights. Examples of Product Franchises include:
Mobil, Goodyear, Baskin Robbins, and Ford Motor Company.
Business Format Franchising.
This is the most popular form of franchising. In this approach, a
company provides a franchisee with a proven method for operating a
business using the name and trademark of the company. The company
will usually provide a significant amount of assistance to the
business owner in starting and managing the company. The franchisee
pays a fee or royalty in return. Examples of Business Format
Franchises include: McDonalds, Dunkin Donuts, Carvel, AMMCO and
Fantastic Sam’s.
Manufacturing Franchise.
These types of franchises provide an organization with the right to
manufacture a product and sell it to the public, using the
franchisor's name and trademark. This type of franchise is found
most often in the food and beverage industry, but can be applied to
other industries. Examples of Manufacturing Franchises include:
Coca-Cola, and Sealmaster. |
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