Posts Tagged ‘Different’
Fundamentally there are two types of franchises. They are Product distribution franchises and Business format franchises. The most significant portion of the product distribution format is that the product itself is manufactured by the franchisor. Many times some sort of pre-sell preparation is necessary on the franchisee end before their sale.
One more important difference between these two types is that in product distribution type of franchises, the franchisor licenses their logo and trademark to the franchisees however he/she does not provide the complete system necessary to run the business successfully. However in the business format type the total system is supplied by the franchisor for running the business. Nowadays most of the franchises are of the type business format franchises. If you look at United States, almost 80% of the totals of 770,000 franchise businesses are of the business format franchise type. Lets have a close look at these two types of franchises.
Product Distribution Franchises: In this type of franchises, the franchisees sell manufactured products to the franchisor. This type of business can often be found in industries such as automobile, drinks and automobile accessories. These franchises are similar to the supplier-dealer kind of relationships. However in the product distribution franchises, franchisee has the benefit of getting more services from franchisor than compared to what dealers will get from their suppliers.