January 21, 2020

What You Should Know Before Investing In European Franchisees Business?

Europe is a vast area to expand the business. Many business houses like to take the opportunity to spread their brand name all through the places with the help of European Franchisees. It is a huge market that has many potentialities that the business owners always come forward to gain access to the market. However, there are some exclusive rules and regulations by the European Franchise Federation that everyone must follow. It is the cornerstone of every franchise business that will develop in a particular system.

To understand how the franchise business value the proposition and the criteria to make the business duplicable as well as transferrable to the individual operators working for the franchise.

According to the Code of Ethics of EFF; “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.”

After the signing of the agreement and the direct or indirect financial consideration, the European Franchisees will get the right to use the trade name of the Franchisor, the technical method and know-how of the business, the procedural system, and rights for industrial and intellectual property, constant technical and commercial assistance within the framework of the business.

In the franchisor business format, there are 5 essential elements that are associated with it:

  1. Brand Name: The registered brand name of the business along with the trademark that will serve as the umbrella sign for the whole network for the consumers and the public.
  2. License: The license will be used by the franchisors to grant permission to the franchisees.
  3. The system in Business: The business concept that incurred the duplicate value package found in the franchisor’s Know-How and constant assistance in terms of the agreement.
  4. Payment: The agreement of the franchise should be based on financial consideration. The franchisees have to pay them the entrance fees or royalty fees and then continuous fees along with indirect form like mark up on supplied goods.
  5. Investment: The ownership of the franchise business by the franchisee comes after investment.

This is the successful implication of all the rules and regulations that have seen the impact. The building up of the network is the heart of the franchise business system.

Julio Licinio

Hello all, I am Julio Licinio(Blogger), freelancer and working in the field of Digital Marketing from past 4 years.

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