Not all business ideas have to be original and instead you can use existing ideas to start a business. In order for this to happen the franchisor (the owner of the business providing the product and service) would need to provide a license to the franchisee (the individual in which these services and products are assigned to). Franchising is a business relationship in which the franchisor assigns to the franchisee the right to market and distribute the franchisor's goods or service, and to use the business name. Franchisees also not only purchase the logo when the license is handed over but they also buy the rights of that company this means the franchisor sets up the details on how the company is run.
Advantages for franchisor
Franchisor takes a percentage of the profit made by the franchisee. The percentage taken is officially called a royalty.
Franchisors are able to distribute both the name and service of their business to multiple individuals thus widening income sources.
Disadvantages for franchisor
Franchises owned by the franchisor may not all be working at the same standard or be at the same quality. This is what all franchisors strive for however, doing this would take a significant amount of time.
Franchisors no longer have the time to partake in the areas of the business in which needs actual labour. For some franchisors this may mean stopping doing the things they love.
Advantages for franchisee
Franchisees are able to use and already made logo and…