FRANCHISE Essays (397 words) - Franchises, Contract Law, Marketing

FRANCHISE Franchise is a type of license that a franchisee receives to allow them to have access to a business's/the franchisor ownership knowledge, processes and trademarks in order to allow the franchisee to sell a product or provide a service under the business's name. In exchange for gaining the franchise, the franchisee usually pays the franchisor an initial start-up and annual licensing fees. Franchises are a very popular method for people to start a business, especially for those who wish to operate in a highly competitive industry like the fast-food industry. One of the biggest advantages of purchasing a franchise is that you have access to an established company's brand name; meaning that you do not need to spend further resources to get your name and product out to customers. An example of franchise is McDonald. At the time of publication, this international quick-service restaurant company has over 75 percent of its worldwide restaurants independently owned. Business owners can purchase a new or existing restaurant. An initial down payment is required, and the rest of the cost can be financed for up to seven years. During the terms of the franchise agreement, ongoing fees include rent and service fees. Some of the qualities the company is looking for in a franchisee are business experience, an acceptable credit history, willingness to complete the company's comprehensive training program and sufficient liquid assets to invest in the business. HOLDING COMPANY Holding Company is a company that is created to buy and owns the shares of other companies. A holding company exists for the purpose of controlling another company, which might also be a corporation, limited partnership or limited liability company, rather than for the purpose of producing its own goods or services. Holding companies also exist for the purpose of owning property such as real estate, patents, trademarks, stocks and other assets. If a business is 100% owned by a holding company. An example of a holding company is Advertising Agencies. In the days depicted in the TV series "Mad Men," advertising agencies kept most of their efforts in house. Today, with so many media outlets from which potential customers can choose, advertising agencies act as holding companies, owning and controlling smaller companies that can specialize in one aspect of marketing. These holding companies also often control small advertising studios that develop websites, print ads and TV commercials.