Franchising is a business and legal agreement whereby a company called "franchisor" is committed to providing a second company, known as "franchise", a brand, expertise and ongoing support in part against remuneration. The term "franchise" applies only if the previous three conditions are met. There are other forms of cooperation between firms developed network license, commission, affiliate, master franchise, partnership, etc...

Summary

1 Operation

2 History

3 Legislative Frameworks

4 Operating Manual

5 Economic Weight in France

6 Notes and references

7 Notes

7.1 Related Items

7.2 External links

Operation

Franchising is a mode of collaboration between an owner of a trademark or brand business (franchisor) and one or more independent traders (franchisees) . The standardized nature of the franchise allows franchisees to start a key activity in hands. Indeed, the franchisee has, from its inception, a set of elements that will not be created (list of products, advertising, management, suppliers, sales techniques, etc. . .). The franchisor undertakes to provide know-how “secret, substantial and identified” and continued assistance to its franchisees. In return, he receives in most cases, an entry fee and flat fees or calculated on the turnover.

The franchisee is a merchant legally and financially independent of the franchisor. No franchise agreement can limit in any way the freedom. Therefore the franchisee runs his business freely within the framework set by the use of the mark or sign.

The franchisee may own his case under various legal forms, such as a corporation. He is responsible for the running of his business. For example, a franchisee may, within the limits of its franchise, manage staff, choose suppliers, set prices, to organize his business, etc. . . .               As he wishes. As the terms of the franchise agreements can be very little or binding, the franchisee may have little or a lot of latitude in managing its business. This management must however be in accordance with the concept.

The franchise is a type of very paradoxical contract which establishes a very clear framework, under which the franchisee may not depart but respects the legal and financial independence of the franchisee.

History

In the middle Ages, the franchises were granted to cities by charters granted by the rulers (dukes, kings, emperors) and guaranteed them the enjoyment of a number of freedoms (Municipal Freedoms). The people were very attached to these franchises, and took care of them confirmed, whenever necessary. Franchises could be suspended in case of conflict, but the people demanded their reinstatement.

On 26 August 1066, the city of Huy in Belgium is the first city in Western Europe have benefited from franchises granted to thank the people who had contributed to the restoration of the church of Notre- Dame de Huy, destroyed after the burning of the city, sacked in 1053 by Baldwin V the Pious (c. 1012-1067 ) , Count of Flanders.

The franchise, however, appears in its current modern form in the period between the two world wars, the United States. General Motors, wishing rapidly expand its distribution network, without falling foul of the very severe in the United States anti-trust law, concluded franchise agreements with independent garages, installed in the most remote locations.

Since the Second World War, the franchise has been a great success in the United States. At this time, lines franchises were offered in all kinds of services to veterans without jobs who wished to exercise independent activities. The same phenomenon was repeated after the Vietnam War. An estimated 40-50 % of total U.S. retail business is done in the context of franchise agreements.

In Europe, the franchise was mainly developed from France (the first system back to wool Penguin, creation of Prouvost Group).