Everything you wanted to know about franchises in the world of fashion labels.
In order to make sure that terms and concepts are understood by everyone, it is preferable to clarify and define them at the outset.
First of all, "franchising" is an economic business method where a company grants a license, a franchise. This is economic process is usually done for a limited period of time. The license is for using trademarks and distributing them for payment during a period of time set by the parent company for the franchiser. In addition, the franchiser will provide percentages of the sales or profits that have been agreed upon in advance, as well as pay for the right to use the company label and brand.
The company granting the franchise can set various conditions for obtaining the franchise in order to ensure that the franchiser meets all the relevant conditions allowed. Not meeting these conditions can result in the franchise not being renewed or even canceled. The franchise agreement will usually indicate the territorial limits of the license, within which the franchise rights will be exclusive.
The term "franchising" began in the 1850s when Isaac Singer improved the existing sewing machine and wanted to increase distribution. He actually created the method of franchising. Much later, the "Coca-Cola" company used the same method.
Modern franchising began in 1919 with fast-food restaurants, followed by hotels. With the opening of superhighways in the U.S., Mcdonald's became the largest franchise in this arena.
Franchising brings with it several advantages: The franchiser is essentially buying a successful business formula, providing a significant shortcut without the need to deal with setting up a new business from scratch. The company granting a franchise is really opening up the licensee's path to success. In addition, the franchise firm, because of its economic strength provides the licensee products at very competitive prices.
For these and other reasons, the franchise system constantly expanded, and the number of franchises continued to grow all over the world while reaping tremendous profits all along the way.
The franchiser distributes the product to the customer. He or she knows and tries to provide the best possible product in the best possible way, in the same spirit as the parent company.
Using this method, a very large distribution network can be created without too large an investment. Today, many customers prefer buying from franchise chains because they know that they are purchasing a quality and reputable product.
The licensee pays a small number of profits to the franchising firm, but at the same time makes even more while increasing the product's popularity. In other words, the direct connection between brand, licensee, and success is very clear.
The licensee receives all of this when he or she purchases the right to use this commercial ownership while also sending the message to the general public through advertising or any other way he or she sees as fit to use.
Franchising is therefore a type of winning, the proper way to enter the world of business as an independent entrepreneur. When you decide to become a franchise of any product or leading label, your chances for success in the business world will be much higher. This is especially true for new entrepreneurs who can more easily find their way into the business world.
Obviously, it is worth paying for the franchise and merit good profits further down the line. In the franchising world, it is customary to pay royalties according to a pre-arranged agreement.
The franchise granting company has a vested economic interest in the licensee's success and is therefore interested in selling the licensee a good brand. On the other hand, the licensee can work at his own pace and according to his own plan for success and greater profits from the particular brand or product. It is therefore highly desirable and advisable to enter the franchise world, especially in the field of fashion.
Today, as the entire globe has become a multi-directional superhighway of information and communication, even the best and leading fashion brands produced in the U.S. are sold and worn in China, Japan, Europe, and anywhere else where there is interest and demand.
The minute you find a serious franchise firm willing to grant you a license for a highly demanded and prestigious fashion label, this is really your ticket to a world of economic success and prosperity.
Every beginning requires the first step and purchasing a franchise can be that crucial step for you.