Franchising

|FRANCHISING |

|HISTORY OF FRANCHISING IN THE PHILIPPINES, OVERVIEW OF FRANCHISING |

|IN THE PHILIPPINES, TRENDS OF FRANCHISING IN THE PHILIPPINES |

|Submitted by: Beverly Jean Gomba BSBM 401 |

|Submitted to: Ms. Elizabeth Rodriguez |

Franchising is the practice of using another firm's successful business model. The word 'franchise' is of anglo-French derivation - from franc- meaning free, and is used both as a noun and as a (transitive) verb. For the franchisor, the franchise is an alternative to building 'chain stores' to distribute goods and avoid investment and liability over a chain. The franchisor's success is the success of the franchisees. The franchisee is said to have a greater incentive than a direct employee because he or she has a direct stake in the business. Except in the US, and now in China (2007) where there are explicit Federal (and in the US, State) laws covering franchise, most of the world recognizes 'franchise' but rarely makes legal provisions for it. Only Australia, various provinces within Canada, France and Brazil have significant Disclosure laws but Brazil regulates franchises more closely. Where there is no specific law, franchise is considered a distribution system, whose laws apply, with the trademark (of the franchise system) covered by specific covenants.

History of Franchising

The word Franchise comes from the Old French meaning freedom or privilege. In the middle ages of Europe, the local lord would grant rights to hold markets or fairs. In essence, the monarch gave someone the right for a certain type of activity. They were the first Franchisors – and did not know it.

In 1851, Isaac Singer accepted fees from independent salesmen to acquire territorial rights to sell his recently invented sewing Machine. The Singer Company began granting distribution franchises and was the first Company to write...