What is a franchise and types of franchises. Types and types of franchises. What is franchise and franchising in simple words - definition and meaning of terms

Hello dear readers of the site business magazine! In this article, we will explain in detail, what is a franchise and how does it work , and also explain the essence of franchising in simple words.

Many, deciding to start their own business, are faced with such a form as franchising (franchise business)... But aspiring entrepreneurs have little knowledge and a vague idea of \u200b\u200bthis way of organizing their business.

From the article it will become known:

What is franchise and franchising in business - what are their differences;
What types and types of franchises exist;
What are the advantages and disadvantages of a franchise business;
What are some examples of very successful and profitable franchises.

The information presented in this article will be useful both to those people who are just thinking about starting their own business and to those who want to expand their business.

So, let's begin!

Franchise and franchising: what is it, what is the difference, what are the pros and cons of starting a franchise business - we will tell about all this in this issue in simple and understandable words

The word "franchise" comes from the French Franchisewhich means "Benefit" and "privilege".

Franchise (from English franchise) is a type of agreement under which one party transfers and the other acquires the rights to a business model, the use of technologies and trademarks.

This term also has a synonym - commercial concession , however, it is used less frequently.

1.1. What is a franchise in simple words - a description of the term + the principle of work on a real example

If we reformulate this definition in such a way that it would be even more understandable, then franchise Is the purchase of the right to open a business under the brand name of any well-known brand... At the same time, they use not only the trademark, but also the technologies - both production and sales, as well as the concept of business activities.

Thus, a practically ready-made business is bought, the payback and profitability of which have already been tested in practice.

Franchiser and franchisee - who are they?

The party that buys the right to sell goods and services under a particular brand is called franchisee... The party selling such a right is called franchisor.

How does this work in practice?

for instance Someone Andrey would like to start working for himself and go into business. For this he either.

Having collected a certain amount of money, Andrey decides to buy a restaurant franchise fast food... So he acquired the status of a franchisee.

Having organized such a restaurant in his city, Andrei soon began to receive income that he did not have while working for other entrepreneurs.

Now he can open a whole chain of such fast food restaurants in his city.

1.2. Related terms regarding franchising

In order to better understand this issue, you need to know other terms that are directly related to the franchise and franchising.

Despite the fact that in our country the first franchise agreements began to be concluded relatively recently, in the world it is widespread practice - and there is generally accepted terminology that makes such agreements and relationships between franchisee and franchisor as clear and transparent as possible.

First of all, since a franchise is understood as a transfer of a license, you need to know what it is.

In this case license Is the transfer of rights that the franchisor possesses (know-how, technology, software, etc.).

At the same time, know-how is any information (relating to production, sales of products, business organization, etc.) that have commercial value, since only their owners are known.

That is, under know-how understands the secrets of doing business or production on which this or that business is built.

The documents with the help of which the right to use a particular trademark is transferred and bought can be called differently, while having one meaning:

franchise agreement;
license agreement;
commercial concession agreement.

When such a right is purchased, the buyer (or franchisee) makes a so-called the lump-sum is the payment for the purchase of the franchise ... If we are talking about commodity franchising, then instead of making a contribution, the contract may provide purchase of a specific stock.

Often the contract is concluded in such a way that its renewal is periodically required. Then a lump sum is paid each time the contract is renewed.

In addition to the lump-sum fee, the franchisee must pay royalty .

What is royalty in a franchise - a description of the term

Under royalty understand those payments that are periodic and are paid throughout the duration of the franchise agreement. These can be fixed amounts or a certain percentage of a business's profits.

In commodity franchising, periodic purchases of goods act as royalties.

When the contract is signed, the franchisee receives franchise package ... It can be both in printed form, and in electronic... This package includes all documents and materials, using which the franchisee can easily and quickly start a business.

The franchise package necessarily includes:

franchising policy;
business management guide;
corporate identity standard passport;
all necessary legal documents.

There may also be aids that are necessary for correct work staff, software etc.

The franchisor is no less interested than the franchisee in making the set of documents as complete as possible - after all, the reputation and popularity of the entire business depends on the correct organization of the business under its trademark.

Franchisers who value their business reputation are very responsible in the formation of a franchise package.

Take note!

A person who wants to become a franchisee and is looking for the most interesting offer can familiarize himself with companies offering to conclude a franchise agreement on the appropriate resources with complete catalog of franchises .

You can always find information about the companies themselves, as well as the cost of concluding an agreement, lump-sum and periodic contributions, the amount of necessary investments for the start, as well as contacts where you can contact company representatives to discuss the details of the transaction.

A novice businessman can just buy a franchise and open a business on it, or master franchise, according to which he will become the sole owner of the right to conduct his chosen business in a certain territory (for example, in a city, region, district, etc.).

"Franchise" and "franchising" - what is the difference between these concepts?

2. Are franchises and franchising the same thing or not?

Very often people who do not have an economic education confuse concepts "franchise" and "franchising"... But being able to distinguish between these two concepts is necessary - especially for those who want to conclude a franchise agreement.

Under the term "franchise" means the very acquisition of the right to sell goods or services under a certain trademark.

Often the word "franchise" is replaced by "Franchise package"... Although, in fact, first the franchise agreements are signed, followed by the receipt of the company's franchise package. The composition of the franchise package is strictly stipulated in the agreement and can be discussed upon signing it.

Franchising: what it is - an overview of the concept in simple words

Franchising is the process of creating, building and running a business on the terms of a franchise agreement.

Thus, the franchise acts as the subject of the relationship between the franchisor and the franchisee, and franchising means doing business on the terms of the franchisor company.

What are the franchises - 7 main types and types

3. Types and types of franchises - 7 main types

Since doing business under a franchise agreement has been used for quite a long time, several different types franchises. They may differ in the degree of involvement in business management on the part of the franchisor, in the form of payment for the franchise agreement, in the place of manufacture of products sold by the franchisee, etc.

Thus, everyone who would like to work under a franchise agreement can choose the most suitable option for themselves.

Type 1. Classic or standard franchise

This is the most used franchise in the world. As a rule, such an agreement implies a lump-sum payment, as well as the presence of periodic contributions to the franchisor.

In this case, the franchisor has the right to control the business process of the franchisee and make his own adjustments. It can also verify the compliance of the business built by the franchisee under the licensing agreement with the requirements, rules and codes of the trademark.

Type 2. Free franchise

Within the territory of Russian Federation this form of commercial concession was most widely used.

A distinctive feature of a free franchise- this is a low amount of royalties and great freedom of action for franchisees.

Thus, the entrepreneur is practically not controlled by the franchisor and has the opportunity to run his business and develop it independently.

Type 3. Import substitution franchises

In recent years, due to the introduction of economic sanctions against Russia, it has become increasingly popular purchase of import substitution franchises ... The demand for them can be explained very simply - consumers in our country are accustomed to goods and products of European origin, which are of high quality.

Since the import into our state and the sale of some such goods and products is now prohibited, russian entrepreneurs strive to enter this market and offer consumers similar products, but manufactured in the Russian Federation.

Thus, when buying a franchise, the technology for the production of certain goods and services is acquired, and the production itself takes place on the territory of our country... This is very beneficial and allows not only to provide our citizens with the things and products they need, but also to receive good profits from this.

Type 4. Silver franchise (turnkey business)

In this case, we are talking about buying really ready business , in the creation and promotion of which you do not need to invest time and money. The owner of this or that trademark independently opens a branch of his company in a particular city, and then sells this business to the franchisee. Typically, in this case, there are monthly payments - branch profit interest .

This is a very convenient way to get started own business for those who do not have a lot of entrepreneurial experience. First of all, since there is no possibility of making a mistake at the stage of opening an enterprise, and also the possibility of non-compliance of the created business with trademark standards is excluded.

When you buy a Silver Franchise, you can start working and generating income immediately.

Type 5. Business for rent

Some franchisors prefer lease a business... In this case, the benefit of the franchisee is that he does not need to create and build a business on his own, and the benefit of the franchisor is the ability to receive monthly income without spending time on managing the business. By the way, we already wrote about that in one of our publications.

At the same time, the franchise agreement stipulates what percentage of income the franchisor receives, and what percentage goes to the franchisee. This is a mutually beneficial cooperation and an option suitable for aspiring entrepreneurs.

Type 6. Gold Franchise (Master Franchise)

Those people who already have experience in doing business and who want to work "on a large scale" can acquire the so-called "Master franchise" .

By concluding such an agreement, the franchisee receives monopoly rights for business in a particular region or city.

Of course, the cost of such a license is very high, but in the future these costs will certainly pay off - after all, an entrepreneur will be able to open a network of companies in this region and remain the only representative of the trademark on the territory indicated in the agreement.

Type 7. Corporate franchise

This commercial concession agreement is ideal for inexperienced businessmen. It assumes that the brand owner will control the development of the business and will be able to conduct it on their own terms.

There are few opportunities for franchisees to make any changes of their own. However, it will be easier for a beginner to learn how to do business under the guidance of an experienced team of professionals.

When choosing the type of franchise, you need to evaluate your financial opportunities, ambitions and business experience. In any case, with such a variety of types of franchises, there is always a way out - even for those who have small start-up capital and experience.

Franchise Business - Main Pros and Cons

4. Advantages and Disadvantages of a Franchise Business

People who would like to become entrepreneurs by buying a franchise often ask themselves the same questions:

how cost effective is it?
does it make sense to invest money, effort and time in franchising?
what are the advantages and disadvantages of such a business?

To answer these questions, you need to think about pluses and cons starting a franchise business.

Pros (+) starting a business with a franchise

There are five main benefits of franchising for a franchise buyer.

Plus 1. Minimum risk in doing business

When an entrepreneur decides to start a business, there is always a chance of failure - the attractiveness of a product or service for consumers may be incorrectly assessed, etc. However, in the case of franchises, this is practically impossible - after all, a novice businessman gets full instructions for development successful business .

As a result, if everything is done according to the instructions, the profit will not be long in coming. The path that the franchisee has to go through has already been passed by the owner of the trademark - and he is guaranteed to bring income.

Plus 2. Brand awareness

A lot of funds if a company is created "from scratch" , goes to its promotion and brand advertising. When it comes to a franchise, such expenses will not be required - after all, the brand is already well known to potential consumers of the product or service.

In this case, the company already has a positive reputation, therefore, when working, the franchisee can use an image that has already won the trust of people and is known in the market.

Plus 3. Quick profit

Since there is no need for advertising and time for the promotion of the company, the first profit will be received very soon after the opening of the company under a franchise agreement. And it's not easy beautiful words, and proven fact.

So, when McDonalds opened in Moscow, on the first day of its work several thousand people have taken a queue at this institution yet before his discovery.

Therefore, you do not need to worry about how to live the first time while the business is at the development stage - the first income will be received very quickly. In a separate article, we also wrote, and what methods additional earnings are possible in their free time from the main work.

Plus 4. Minimum advertising campaign costs

The lion's share of the costs of starting any company falls on advertising. In addition, it is not so easy to find really good specialists who can attract the maximum number of consumers to the company. Moreover, success is or largely determined by how much she is able to retain her customers.

A franchise agreement avoids all these expenses and headaches for a businessman. Franchisors supply their franchisees with a complete package of documents for starting and running a business, and this package includes complete recommendations for conducting successful advertising campaigns and all kinds of events.

Plus 5. The ability to receive support and training

Usually, when starting his own business, a person finds himself face to face with this situation. He has no one to ask for help or advice. When concluding a commercial concession agreement, everything is different - not only he himself is interested in the success of the franchisee, but also the owner of the trading network... That is why the franchisee will receive maximum support and, if necessary, complete training. As a result, he will be able to successfully run his business and receive the desired income.

In addition, most franchisors offer ongoing supervision and assistance from qualified lawyers in situations where such assistance is needed.

Thus, with the full support of the franchisor, the business will grow very quickly and the franchisee will make a profit. But there are also downsides to starting a franchise business.

Cons of (-) franchise business

There are also five main ones.

Minus 1. Lack of the ability to "self-maneuver"

As a rule, all actions of a beginner entrepreneur are strictly regulated, and he must adhere to the rules and codes that the franchisor has supplied him with.

A businessman does not have the opportunity to show his creativity in running his business - he must coordinate everything with the owner of the trademark.

Minus 2. The need to make periodic payments or purchase goods and equipment

If an entrepreneur does not work under a franchise agreement, then he can appropriate all income and spend as he wishes. And the franchisee must make recurring payments (usually once a month) and, in some cases, purchase goods or equipment from the brand owner. It - additional expenses that will need to be deducted from income throughout the duration of the franchise agreement.

Minus 3. High price for franchises

Despite the fact that starting your own business under a franchise agreement is much easier than without this agreement, franchises cost a lot. This is especially true for well-known and promoted brands and master franchises.

Minus 4. Control by the brand owner

Not every entrepreneur will like the fact that someone controls his every step. And it is impossible to avoid this control when buying a franchise. The franchisor will monitor all business processes to make sure that the franchisee is doing everything possible to get the most out of the business.

Minus 5. The impossibility of applying a creative approach

The franchisee does not have the right to independently choose the direction of development of his business or be creative when developing marketing and other programs. He must strictly follow the development program proposed by the franchisor.

Thus, franchising, like any other form of business, has more than just merits.

In the table below, we present the main criteria (parameters) for comparing starting a franchise business and a traditional business:

№	Comparison options	Business as usual	Franchise business
1	Business promotion terms	Months and years (-)	Several weeks (+)
2	Risks	High (-)	Low (+)
3	Initial investment	Large (-)	By agreement (±)
4	Support and help	Absent (-)	Available (+)
5	Advertising costs	High (-)	Low (+)
6	Freedom of doing business	High (+)	Low (-)

The table shows that the main differences between a franchise business and a "regular" traditional one are the timing of business promotion, advertising costs, risks, initial investment. money and the freedom to do business.

Popular franchises for small and medium businesses

5. TOP 5 franchises for those wishing to become a franchisee

Before deciding to conclude a franchise agreement, you need to look at real-life examples of such a business. It is worth paying attention to the companies entering in TOP-5 the most popular brands offering such an agreement.

1 place. "McDonalds"

This company is known, without exaggeration, all over the world. The owners of this company came up with the idea of \u200b\u200bfranchising, deciding to bypass competitors and spread their network catering outside America.

However, when thinking about purchasing a franchise from this company, you need to get ready to invest a lot of money on the first initial stage... To start this business, you need to not only purchase a franchise for 45 000 dollars, but also have an initial capital of at least 950 000 dollars. Not every aspiring businessman can afford it.

Most often, franchises are bought by wealthy businessmen as an investment of money.

2nd place. Popular supermarket chain "Perekrestok"

These supermarkets sell products for those who prefer high quality, freshness and good service... But in order for this franchise to bring a stable good income to its acquirer, the supermarket must be located in a busy and densely populated area of \u200b\u200bthe city, have a parking lot and convenient access roads.

In addition, the franchisor makes high demands on the area of \u200b\u200bthe premises in which the supermarket will be located, for internal communications, lighting, and even for window dressing.

3rd place. Restaurant "Subway"

This is an ideal option for aspiring entrepreneurs, because the cost of the initial payment for a franchise agreement is 7 500 dollars. In addition, the franchisor is happy to provide its partners with various bonuses and benefits, reduce the lump-sum fee and provide comprehensive support in solving legal and marketing issues.

It is for these reasons that the chain of these restaurants is constantly growing in Russia. Today, approximately 700 such restaurants in different regions of the country.

4th place. "Coffee to go"

Coffee shops "Coffee with you" deservedly take the fourth place in the rating. Since the cost of the franchise is only from 100 to 400 thousand rubles. Many people who want to open their own business on the basis of a franchise agreement opt \u200b\u200bfor this particular brand.

In addition, this is a very popular destination, because there are more and more lovers of high-quality and tasty coffee, as well as those who spend most of the day on the run and cannot stop at a cafe to drink coffee.

5th place. "Orange Elephant"

The fifth place in the TOP-5 is taken by the Orange Elephant franchise chain of stores with goods for children's creativity. The dynamics of the development of these stores is impressive, in addition, this network has not yet been promoted to the maximum and is not present in all cities. This means that franchisees have a great chance of success with relatively little competition.

At the same time, the chain not only sells, but also manufactures goods for children's creativity presented in its stores. Today the network has franchisees in America, Turkey, Israel, Iceland and many other countries.

Thus, each novice merchant can choose the franchise that suits him exactly - both in terms of the specifics of the activity, and in terms of cost and requirements for initial capital.

6. FAQ - Frequently asked questions regarding franchises

There are questions that are asked most often by those wishing to conclude a franchise agreement.

Question 1. How to choose the right franchise?

First of all, you need to decide on the amount that the entrepreneur is ready to invest in his business at the initial stage. Today you can find both inexpensive franchises and those that require very large financial investments.

There is no need to overestimate your capabilities, because the success of your business largely depends on this.

Having chosen several franchisors in the right price category, you need to study all these brands and answer the following questions for yourself:

what are they doing (what goods or services are offered);
what is the policy of these companies;
what kind of advertising they run.

Based on this, you need to focus on one company - the most suitable for its specifics. This is very important, since a businessman should be happy to do his "brainchild". There is no point in turning into the work of your life that to which your soul does not lie.

Then you need to contact the company representatives and discuss all the questions of interest regarding the conclusion of the contract. If everything suits you, then the job is done and the franchise has been chosen.

Question 2. Is it worth starting a franchise business if you have no experience?

One of the main advantages franchising means that it allows you to start your own business even for those who had nothing to do with the business before.

It is safe to say that in the case of a franchise, the risks for the entrepreneur are minimal. This is due to the fact that, after the conclusion of the commercial concession agreement, the owner of the trademark (franchisor) provides the novice merchant with a business plan and detailed instructions for creating and promoting a business. By the way, you can in one of our previous materials.

Thus, the franchisee not only receives a guaranteed income in the very near future, but also invaluable business experience.

Question 3. How much does the franchise cost and what does its cost depend on?

The cost of concluding a franchise agreement may vary.

The price depends on several factors:

brand promotion;
type of franchise ( eg , a master franchise will always cost much more than a standard franchise - but it will also generate large revenues);
ambitions of the brand owner.

In addition, you need to take into account the lump-sum and periodic payments in favor of the franchisor - they can also be attributed to the costs of the franchise.

There are franchises ( eg, "Orange Elephant"), which cost relatively inexpensive, do not require very large material investments at the start-up stage, but they are quite profitable for their own business.

And there are also such as, for example, the KFC fast food restaurant franchise, where the initial payment is from 47 thousand dollarsand investment from 700 thousand $.

KFC restaurants franchise

Question 4. Is there a franchise without investment?

Turnkey business without investment - this is perhaps dream any aspiring entrepreneur. But is it possible to make this dream come true?

Indeed, there are companies offering to conclude a franchise agreement without the first - lump-sum - fee. However, this does not mean that you will not need to invest in the business. Franchisees have to invest own funds when building or renting premises, ordering advertising campaigns and paying salaries employees. Thus, completely avoiding costs at the initial stage is unrealistic.

In addition, any franchisor will require royalties, which are usually around 10 % of income under the franchise agreement.

Therefore, in any case, you must not forget about the necessary costs. But in the case of a franchise, the business really pays off much faster than the usual one.

Question 5. What franchise business can be opened in 2019 with minimal investment?

When deciding to open your own business under a franchise agreement in 2019, you need to remember about five most popular destinations which are more likely to bring quick income:

internet sphere;
the sphere of service and provision of services;
the sphere of public catering;
trade;
production.

There are franchises that are promising and promising quick profits to their franchisees:

Multi-windows - a company selling windows from different materials; initial payment - from 100 thousand rubles.
Ticket Com - a company that advertises on receipts that are issued to customers when paying for purchases in stores; initial payment - from 150 thousand rubles.
Linguitania - a network of centers for the study foreign languages, the lump-sum contribution is 220 thousand rubles.
STARDOG! S - food service outlets that sell hot dogs. The lump-sum fee can range from 22 to 330 thousand rubles.
Gift calendar - a network that sells souvenirs and accessories for the holidays, requiring initial capital in the amount of 790 thousand rubles.

P.S. You can also check out profitable beginners in one of our articles.

7. Conclusion + related video

In this way, conclusion of a franchise agreement - a real and fairly easy way to start your business from scratch. It is especially suitable for those who do not yet have experience in starting and running a business.

In addition, in the process of setting up and running such a business, you can learn a lot from the more experienced business people who own the brand.

Many successful entrepreneurs today started out with buying a franchise - and they were not mistaken with their choice. Anyone can do this, even without having a lot of money for a down payment!

The team of the magazine "RichPro.ru" wishes its readers success in all business endeavors! We are waiting for your ratings of this material, comments and thoughts on the topic of publication in the comments below. Thanks in advance!

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Classmates

One of the important components of a successful business is a clear understanding by the entrepreneur of the essence of franchising and its varieties.

Franchising - this type of market relations in which the franchisor (one party to the agreement) transfers to the franchisee (the second party) for a fee the right to conduct any type of business using the developed technology.

According to the type of relationship between the parties to the agreement (franchisor and franchisee), there are several main types.

1 ... Franchising is commodity. This type of relationship is also called product franchising. It is mainly used in the commercial area. By concluding such an agreement, the franchisee acquires the right to sell the goods released under the franchiser's trademark.

As a rule, the franchisee is entitled to after-sales and warranty service of the product. The franchise agreement strictly regulates the technology of sales, the range of services and goods, and clear rules for using the manufacturer's trademark.

If the franchisee purchases from the manufacturer trade software or real estate, the franchisor provides him with financial support, supplies advertising technologies, trains personnel. Examples of commodity franchising are the sale of cars, fuel, household appliances.

2. Manufacturing (industrial) franchising. A company possessing a patented technology for manufacturing a product transfers the franchisee the right to manufacture and sell products under its own brand name.

The company transfers to the second party, in addition to the patent for production, raw materials and exclusive ingredients that only it produces using secret technologies.

In addition, the contract specifies clear requirements for production process, the volume of products, their quality, sales plans. Staff qualifications and full reporting are also discussed.

A large company supplies equipment on preferential terms, assists in training employees, organizing production, sales and creating advertising for products.

Manufacturing franchising is widespread in the production of soft drinks. A striking example is the Coca-Cola company.

3. Service franchising . The franchisee is granted the right to engage in a certain type of service under the brand name of the franchisor, which provides the partner with equipment, advertising and marketing technology.

In addition to support, the franchisor company necessarily monitors the work of the "junior" company. An example of service franchising is a dry cleaning chain.

4. Business format franchising (business)... In this case, the franchisor transfers to the partner not only sales rights, but also a license to organize this type of business.

The documents clearly stipulate the business concept, give detailed instructions for training employees, requirements for the interior design of the company, for the uniform of personnel. Advertising policy, reporting, relationships with suppliers of goods are regulated.

Thus, a franchisee company operates under the sign of a franchisor firm and necessarily adheres to the same business concept.

The conditions are strictly followed big company... This type of franchising is used, for example, by a chain of fast food establishments (for example, McDonald's).

Business franchising is gaining momentum every year and today, according to experts, is one of the most promising, crisis-resistant varieties of doing business.

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Deductible - the terms of the insurance contract, according to which the insurer is exempted from compensation for losses in the established amount. The deductible can be set in absolute or relative terms to the insured amount and the assessment of the insurance object, as well as as a percentage of the amount of damage. It is of two types: conditional and unconditional.

1) A conditional or integral (non-deductible) deductible means the release of the insurer from liability for damage not exceeding a specified amount, and its full coverage if the amount of damage exceeds the deductible.

The conditional deductible is entered into the insurance contract using the entry "free of x percent" (where x - 1, 2, 3, ... is the percentage of the insured amount). If the damage exceeds the established deductible, the insurer is obliged to pay the insurance indemnity in full, regardless of the reservation made.

2) Unconditional, or excess (deductible), deductible means that this deductible is applied unconditionally without any conditions. In the case of an unconditional deductible, damage in all cases is reimbursed less the established deductible. An unconditional deductible is made out in the insurance contract with the following entry: "free of the first x percent" (where x \u003d 1, 2, 3, ... - interest, always deducted from the amount of insurance compensation, regardless of the amount of damage).

In case of an unconditional deductible, the insurance indemnity is equal to the amount of damage minus the amount of the unconditional deductible. The franchise agreement saves on investigating the circumstances of the case.

11. Organizational structure of the insurance process

1) risky circumstances;

2) risk situations;

3) the cost of the insurance object;

4) insurance event;

5) the sum insured;

6) insurance premium;

7) insured event;

8) damage to the policyholder;

9) insurance payment.

The relationship between these elements forms the organizational structure of insurance. The insurer, before concluding the contract, studies and analyzes, observes and takes into account various essential factors of the insurance object. Determines the state and environment in which he is.

For example, the procedure for concluding and maintaining a life insurance contract is an algorithm of sequential operations carried out by the insurer and the policyholder, the main stages of which are as follows: 1. Preparation of the contract. 2. Acceptance (acceptance) by the insurer. 3. Conclusion of a contract and issuance of an insurance policy. 4. Performance of the contract: a) amendments to the contract; b) payment of insurance premiums; c) management of mathematical reserves accumulated under the contract; d) carrying out possible financial transactions under an insurance contract. 5. Termination of the contract.

12. Insurance brokering, emergency commissioners, adjusters and surveyors

Organization of services of adjusters, emergency commissioners, surveyors: preparation and execution of documents related to insured events, as well as necessary for the implementation of insurance payments, organization of insurance payments on behalf of the insurer and at his expense.

Emergency Commissioner - an individual or legal entity, whose services the insurers resort to to protect their interests in the event of an insured event with the insured property.

The emergency commissioner acts in strict accordance with the instructions that the insurer sends him:

1) inspect the damaged property;

2) establish the nature, reasons and amount of the incurred loss;

3) at the direction of the insurer, is engaged in the sale of damaged property;

4) carries out the search for the missing property;

5) collects information about the local insurance market.

Adjuster - an individual or legal entity representing the interests of the insurance company in resolving issues related to the settlement of the policyholder's stated claims in connection with the insured event. The adjuster carries out a risk assessment after an insured event (risk materialization) and seeks to reach an agreement with the policyholder on the amount of insurance compensation to be paid, based on the obligations of the insurer under the insurance contract concluded by him.

Surveyor- an expert inspecting property that is accepted for insurance determines its value and an acceptable insurance amount. On the basis of their conclusion, the insurer decides on the possibility of insuring a particular object, on the amount of the tariff rate.

Before starting a business, you need to carefully understand what kind of franchises are. Recall that it can be a commodity, production or “in the service sector” - look at the site. But by the nature of the relationship between the franchisor and the franchisee, it can also be subdivided into different types franchises.

This is a standard franchise, which assumes strict adherence to the rules of the franchisor, regular transfer of royalties, and payment of a lump sum. The organizing company critically evaluates all the actions of its partner, requires him to submit a monthly report, monitors the fulfillment of the terms of the contract, sets the trade margin himself and controls how much profit the point brings.

But on the other hand, a novice franchisee understands the case faster and passes the break-even point. Unfortunately (or fortunately?) This type of franchise is not very common in Russia, since most entrepreneurs still prefer to run their business on their own, at least "almost".

This type of franchise allows businessmen to “feel like owners”. They independently resolve all issues related to the case, set trade margins, and make sure that the business is profitable. In fact, when working on a free franchise, entrepreneurs are the same dealers, only they have certain advantages over them. They are entitled to:

use of the trademark of a company-organization;
work under her promoted name;
receiving free consultations from managers;
passing trainings and courses conducted by the franchisor;
good discounts for the purchase of goods produced by him.

And one more thing: the franchisee is issued a ready-made list of verified suppliers working under special conditions. The down payment is minimal, and royalties are small, which allows you to start a business without major investments. And most importantly, the company has almost no control over the partner's activities. Therefore, this type of franchise is common in the CIS.

This is the most expensive type of franchise, but also the most convenient. In this case, the franchisor provides the entire business on a turnkey basis for a certain rental amount. The tenant, that is, the franchisee, becomes entitled to conduct the business as he pleases. The organizing company does not follow its activities at all. The only thing that requires - that the partner provides the proper level of profit. Note: this type of franchise is popular in Europe, but in Russia this kind of cooperation is almost never found.

Here, as in the previous case, the franchisor organizes the business himself. He creates on the territory of the partner a branch of the company that meets all his standards. But he does NOT transfer ownership rights to the entrepreneur, but continues to carefully monitor all his actions. The franchisee does business and receives a percentage of the profits, that's all. In fact, he is an ordinary manager.

This type of franchise is also called "gold". It allows the franchisee to engage in brand resale throughout the country, not just in their region. Naturally, everything happens under the control of the organizing company. And one more thing: when working on such a franchise, an entrepreneur has the right to “occupy” a separate region. That is, to work in it alone.

This type of franchise implies strict control by the franchisor. It is he who controls the conduct of the business and owns the assets. The entrepreneur does not have the right to independently make decisions and do anything without the consent of the organizing company. At the same time, it is strictly forbidden to break the contract and create the same business on the territory, but already under a different trademark. This is written in the contract!

This is the most old look franchises in Russia. Entrepreneurs worked on it back in the 90s of the last century. They took the brand idea, renamed it, and started doing business overseas. Only then it was illegal, but now everything is official, that makes all the difference.

This is the last type of franchise on our list. It is in high demand. But not all Russian banks are ready to work on it. And if they do it, then they are very reluctant. Therefore, those wishing to buy a bank franchise line up.

When a person opens his own business, he has to face many problems - to promote a brand from scratch, to develop technologies. In such conditions, it takes years to get a decent result. But at this time, competitors do not stand still, as the heroine said. Carroll, « you have to run to stay in place". That is why everyone who knows what a franchise is and how it works, tries to compare the possibilities of a franchise before investing big money in their business.

What is a franchise and how does it work? How to buy a franchise and what typical mistakes is the entrepreneur doing? We will try to provide the most complete information.

What is a Franchise in simple words

Franchise Is when businesses with proven technology and a well-known brand allow other companies to use their name. In addition to the name, they convey other knowledge, such as production technologies, corporate standards, rights to patents and inventions. This is the definition of a franchise in simple terms.

The first company that comes to mind when we hear the word "franchise" is McDonald'sbut franchising has much older roots. Isaac Singer, inventor of the famous sewing machine Zinger, in 1858 he was the first to lay the foundations of the concept of franchising. He started selling licenses to distributors in different parts of the country, providing them with his own products and training staff.

According to the formal definition, a franchise is a permission for a legal entity or an individual to enjoy the benefits franchisor... Moreover, the one who acquires this right is called franchisee, and the whole business model is called frechising.

Sometimes this right is transferred free of charge, but more often franchiseeis obliged to pay for the benefit received. The board is divided into two parts:

Lump-sum payment... A one-time amount that is transferred when concluding a franchise agreement.
... Monthly or yearly payment.

Each franchisor company develops its own terms, which may differ significantly.

There is no concept of a franchise in Russian legislation. Chapter 54 of the Civil Code of the Russian Federation introduces the definition of a commercial concession, according to which the transfer of a set of goods by the rightholder takes place.

The aforementioned fast food restaurant chain owns less than half of 36,000 restaurants; most are open to franchises. grants the right to use your famous brand, logo, menu, and so on. Businessmen who own restaurants, in turn, pay royalties, which are calculated as a percentage of sales.

This is the main trade-off in franchising relationships. Franchiser ( in this example McDonald's) allows other people (franchisees) to use the business model and brand awareness, and in return receives a percentage of the turnover.

What are royalties and franchise lump sums

One of the most frequently asked questions is how much does it cost to start a franchise business? You can estimate the costs at the stage of choosing a franchise.

The down payment in the form of a fixed amount is called lump-sum payment, periodic payments for the continuation of cooperation - royalty.

In exchange for the right to use the franchisor's name, product, or technology, some or all of the following fees are usually required:

Lump-sum payment - the initial deductible fee, which is not refundable. The amount of money varies greatly, but the tendency is as follows: the higher the degree of brand recognition, the more expensive it is to enter "under the wing" of a strong company.
paid on a regular basis ( monthly or quarterly) during the term of the contract. A kind of membership fee, in fact. Fixed amounts or percentages of gross sales - the options vary.
Tuition fees - some franchisors include training in the price of a lump-sum fee, some take it out on a separate line.
Advertising fees are entered into the advertising or marketing fund of the parent company. This money is spent on TV and radio advertising, development and printing of POS-materials (booklets, posters, leaflets).
Renewal of the franchise (renewal) - fee for the renewal of the franchise agreement.

Large franchisors often develop multiple brand entry schemes. Preliminary calculations of payback and profitability for a specific region are taken into account.

For example, the franchise “ 220 volt»Is transferred free of charge, but the partner undertakes to purchase the goods only from the franchisor.

Types of franchises

The word franchise translated from french means " privilege". As you know, the benefits are different. Depending on how different franchisors allow their name to be used and what they offer in return, there are three main types:

business franchise;
commodity;
production.

Business franchise

What is a business franchise? This is the most common type of relationship in which a franchisor offers a well-established business, including a name and trademark, to independent entrepreneurs. A good example of this kind are fast food restaurants. In the catalog of franchises are presented how long-established brands - Papa Johns, Coffeeshop Companyand new ones - " Food from the Champion", Bar" Darling, I will call you back».

The franchisee receives assistance from the parent company in the selection, planning and design of premises, recruiting and training personnel, and developing the marketing component. Lump-sum fees and royalties vary greatly, sothat it is necessary to carefully look at the conditions of each specific company. This type of franchise is often referred to as a "turnkey business", as the franchisee gets almost everything needed to start their own business.

Commodity franchise

The franchisee receives the right to distribute the product manufactured by the franchisor. Well-known product franchises are, for example, any other car manufacturer, some brands of clothing and shoes: Incanto, BAON, ALBA.

This type of franchise often does not involve royalties. The franchisee is obliged to purchase a certain amount of the product or product range of the franchisor. And he provides national advertising campaigns, provides the logo and trademark.

Manufacturing franchise

The manufacturer grants the right to manufacture and sell goods using its brand and trademark. This type is widespread in the food and beverage industry, for example -.

Another technical point that is important to understand when looking for a suitable idea for investing money. The rights that a franchise agreement provides are very different in one case or another.

What are the franchises

Direct franchise - the franchisor grants the right to open one enterprise in the agreed place. Oldest and most simple form relationships. The disadvantage is this: if the franchisee has the desire and ability to open additional points, each time a new agreement and new monetary contributions are required. That is, using the example of a clothing store: it is impossible to open another store without coordinating the issue with the parent company and without paying a lump sum.
Multi-franchise - the buyer gets the right and the obligation to launch a certain number of production / trading places in a certain territory for a fixed period of time.
Master franchise is similar to the previous paragraph, but has one significant difference: the franchisee receives the right and obligation on its own behalf to sell the franchise in the territory approved by the contract. The Master Franchisee becomes the franchisor in his region.

Let us emphasize again: in the last two versions of the franchise agreement, a right and an obligation are provided.

If the franchisee does not keep up with the contractual pace of development and expansion, this is punishable: termination of the contract, penalties, transfer of exclusive rights to another businessman, etc.

In addition, there are the following types of franchises:

Free... The franchisee gets the right to use the brand, but its actions are not controlled by the owner of the rights.
Silver... In this case, the company opens a branch, organizes its activities and only after that sells the right of temporary use.
Gold... Transfer of monopoly rights to conduct business under the brand of the copyright holder in a particular region. The buyer of the gold franchise decides for himself how he will use the name and develop the business.
Import substitution... This scheme is somewhat similar to plagiarism. A businessman works in the country under the name of a well-known company and does not pay royalties to it. What is it like " Adidas"And" Abibas", The names are similar and there is nothing to complain about. However, such a business has nothing to do with the original brand.

The Civil Code requires that every commercial concession agreement be registered with Rospatent. In this case, the franchisor must first register his trademark and technology there. Theoretically, it is possible that McDonald's will miss the re-registration period, then any entrepreneur will be able to register it.

Almost every industry has successful, well-established business practices. Franchises of retail stores, beauty salons, fast food restaurants, factories and many others are sold. For convenience, we have collected in a table some popular brands - a mini-catalog of franchises.

Notable pizzeria franchises

	Lump-sum payment		Total investment	Payback period
Dodo Pizza	350 000	3-5%	3 000 000	1 year
Pizza Celentano	400 000 – 800 000	2%	2 000 000	1 year
Papa johns	1 000 000	6%	10 000 000	2 years
Domino`s Pizza	2 000 000	7%	15 000 000	2 years

In pursuit of profit, it is important to strive not only for momentary gain. Ray Kroc, the founder of the McDonald’s chain mentioned more than once said:

"If I had a brick every time I said 'quality, service, cleanliness', I think I would cross the Atlantic Ocean."

What should be in the contract

A typical franchise agreement consists of several hundred pages. About, what is a franchise in simple wordsit is difficult to explain, and it is even more difficult to do it on paper. Therefore, without legal support, a businessman will not be able to understand the intricacies. For example, the Civil Code contains the following norms:

The term of the contract does not have to be specified. But if there is one, it is necessary to agree on the terms of the prolongation.
Only legal entities and individual entrepreneurs have the right to be parties to the contract, individuals this is not available.
You cannot conclude an agreement in any other form other than written.
The franchisor is obliged to train not only the franchisee, but also his employees to own technologies.
The buyer of a franchise must comply with all seller's requirements for product or service quality assurance.

The contract prescribes control technologies, be it mystery shoppers, passing exams or visiting inspectors.

How not to fall for the bait

Having entered the franchisor's website, the visitor blooms with delight. And the investment is minimal, and the support is comprehensive, bonuses promise and lure gifts. This is all hosted on a one page site.

When it comes to signing a contract, a businessman finds a document in front of him on a hundred pages... This is not an exaggeration, this is the size of a standard contract. Moreover, it was drawn up taking into account the interests of the franchisor. How the franchise works and how it protects the franchisee, he must take care of himself. Even if at first glance the offer seems tempting, you should only believe the contract written on paper.

When concluding a contract, it is worth engaging a lawyer, his payment will be repaid many times over in subsequent savings. If it will be difficult to make your own additions to the standard agreement with McDonald's, then you can easily insist on the cancellation or change of several points in the agreement with a lesser-known company.

What questions should you ask the franchisor:

When did the franchisor start selling the franchise? If the franchise is young, and the results of the franchisee's activities are not yet clear, this is another reason to think.
Is the business financially successful? Having seen the results of activities over the past three years, you can roughly orient yourself in the prospects for your own business.
How many franchisees have closed? The percentage of success and failure is not a theory of probability, but specific numbers that give an idea of \u200b\u200bthe odds.
What kind of support is provided? Premises appraisal, staff training, payback calculation, advertising and promotion in a new region? What does the franchisee get besides the brand?

The short list of questions can and should be supplemented by questions that arise during the study of the proposal. And most importantly: business is not a statue carved in stone, everything flows and changes.

Pros and cons of the franchise

A time-tested business system that has been tested more than once in different regions is an indisputable and main advantage of buying a franchise. To fill the shots yourself or copy the experience of a successfully developing and competing company?

Arthur Bartlett, founder Century 21 Real Estate: "The franchise became the savior of free enterprise, it gave small businesses a chance to survive ..."

Yes, franchising business does reduce the risk of failure. Not as significant as the advertising brochures of interested firms promise, but still. US statistics confirm that 90% of do-it-yourself business projects fail in the first three years.

Compete with big business individual entrepreneur - difficult task. Recognizable brand, special conditions cooperation is an obvious plus that a franchise gives.

“The world does not stand still. We don't deserve to be where we are if we don't get ahead of things and take the necessary steps to stay competitive. " Fred DeLuca, founder Subway.

The franchisor provides proven business technologies that are constantly being improved: advertising, marketing, administrative support. Lack of knowledge and experience is not a problem - the franchisor provides training to the franchisee.

In many cases, the franchisee receives exclusive territorial rights, a monopoly on the allocated area. Of course, under the brand name of the franchisor. If a brand is successful and recognizable, it will "crush" competitors in the niche.

The sad fact is that some franchises hit 80% bounce rates, while others have fewer failures.

Before signing an agreement, you must carefully read the statistics: how many projects are successful, how many have closed. Talking to the owners of the franchise is not the last thing, you do not need to spare money and time on this item. Openingfranchise may seem in a simple way run your own business. But some factors are not striking, and the idea is so tempting that a potential franchisee steps on the rake of unlucky predecessors.

Franchising is not flexible method business. Features of a particular area, which the franchisee can see and understand well, are often not obvious to the franchisor. Make changes to the business format, offer additional discounts to customers, choose a product in accordance with the tastes of buyers ( in retail store, eg) Is not always possible.

If an agreement is signed that obliges the franchisee to expand the network, the business must work well and bring profit to the franchisor. Failure to comply with agreements is a reason for the franchisor to refuse to cooperate, without compensating any damage to the franchisee.

Instead of output

You can already understand what a franchise is in simple words - an agreement that allows one of the parties (franchisee) to sell a product or service using a trademark, marketing strategies and technology to the second party - the franchisor.

Franchising is a progressive business method that benefits both parties.

During " catch the stream"And" collect the cream"On a new trend is the dream of any entrepreneur. However, it is better to do the opposite here. You need to look for a franchise that has already established itself. Sustainable growth, low percentage of “burnt out” franchisees are the only indicators to be guided by.

Marriott, hotel chain founder: “My life experience shows that success is never final. We make decisions on the way to the end result ”.

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