The different types of franchises

There are three types of franchises, and they are: manufacturer franchise, distribution franchise and service franchise.

The production franchise

In manufacturing franchising, the franchisor is an industrial enterprise that produces its own goods and distributes them through its own network of franchisees

This type of brand is characteristic of the clothing sector (it is the classic case of the branded shop), footwear, accessories, bags, furniture, and is characterized by the fact that the product is also branded software for franchisor.

The distribution franchise

Distribution franchising is typical of those chains where the franchisor acts as a purchasing center.

It buys large stocks of products from different manufacturers, thus acquiring a strong margin and redistributing them to the affiliates, so the franchisor selects the suppliers and for the affiliate there is an advantage represented by the fact of having a single interlocutor who has selected the products for him , namely the franchisor.

Currently the distribution franchise groups 50-60% of the brands present.

The service franchise

Service franchising is also very popular.

In this case, no product is distributed but services are offered, which can range in the most diverse fields. Franchising of catering, travel, credit mediation, internet services fall into this sector.

When it becomes part of a franchise network, however, there are fewer costs than would be incurred if you were to open your own business.

In fact, there is no need for expenses for the furnishing design of the room, even the graphics and the image are studied by the parent company. There is no need to gain experience (the parent company already provides a training course) and there is no need to make the brand known since generally the parent company’s brand is already known and this allows the affiliate to open a new activity immediately recognizable and known to all.

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