The majority of people who have ever heard of franchising typically associate it with the McDonald’s fast food chain of restaurants. In reality, franchising is an effective organizational form for expanding successful business models and is quite widespread in the most diverse segments of economy.
The main idea of franchising is in replication of a successfully operating business, i.e. in purchasing the license to render the products, use the techniques, and trademarks of an existing business that has proved successful in practice. A franchiser grants the franchisee the right to use its name, logo, experience, knowledge, as well as production technology and management system. At the same tie, the franchiser is typically obligated to provide assistance in the launching of the business, and render technical and consulting assistance.