What is Franchising

We start our inaugural podcast episode by answering a basic question, “What is franchising?”

You can read the page on the International Franchise Association Website where the article that was read on this podcast was sourced at: https://www.franchise.org/faqs/basics/what-is-a-franchise


Tom DuFore, Big Sky Franchise Team (00:00):

If you’ve been wondering how to franchise your business or how to take your company to the next level, then this podcast is for you. The purpose of our podcast is to share frequent jam packed episodes with useful and practical information to guide you on your franchise journey. I’m your host, Tom DuFore, CEO of Big Sky Franchise Team and a serial entrepreneur, and welcome to the Franchise Your Business Podcast.

Tom DuFore, Big Sky Franchise Team (00:24):

Welcome to the first episode of the Franchise Your Business Podcast and to get the whole series started I thought it’d be great to start with defining what a franchise is. So what is a franchise? And so to answer that question I thought let’s go to the International Franchise Association, the world leading authority on all things franchise-related. I thought let’s see what they have to say.

Tom DuFore, Big Sky Franchise Team (00:52):

So this is from the International Franchise Association website at franchise.org under what is a franchise and here’s what they wrote. “A franchise or franchising is a method of distributing products or services involving a franchisor, who establishes the brand’s trademark or trade name and a business system, and a franchisee who pays a royalty and often an initial fee for the right to do business under the franchisor’s name and system.”

Tom DuFore, Big Sky Franchise Team (01:20):

Technically the contract binding the two parties is the franchise, but that term more commonly refers to the actual business that the franchisee operates. The practice of creating and distributing the brand and franchise system is most often referred to as franchising. There are two different types of franchising relationships. Business format franchising is the type most identifiable in a business format franchise. The franchisor provides to the franchisee not just its trade name, products and services, but an entire system for operating the business.

Tom DuFore, Big Sky Franchise Team (01:59):

The franchisee generally receives site selection and development support, operating manuals, training, brand standards, quality control, a marketing strategy and business advisory support from the franchisor. While less identified with franchising, traditional or product distribution franchising is larger in total sales than business format franchising. Examples of traditional or product distribution franchising can be found in the bottling, gasoline, automotive and other manufacturing industries.

Tom DuFore, Big Sky Franchise Team (02:35):

So next headline says, “Franchising is about relationships.” Many people when they think of franchising focus first on the law. While the law is certainly important, it is not the central thing to understand about franchising. At its core, franchising is about the franchisor’s brand value how the franchisor supports its franchisees, how the franchisee meets its obligations to deliver the products and services to the systems brand standards. And most importantly, franchising is about the relationship that the franchisor has with its franchisees.

Tom DuFore, Big Sky Franchise Team (03:14):

So we’ll stop right there for this first episode and talk a little bit about that. But basically what we’re saying here, a franchise and a franchisor is when there’s a business being franchised in business format franchising where there’s a system and a brand that another person is allowed to use to operate and run their own business under. And so that’s our very first episode today, folks.

Tom DuFore, Big Sky Franchise Team (03:41):

Please, please, please make sure you subscribe to the podcast so you get all of our future updates. And it’d be awesome if you could leave us a review, especially as we’re just developing this. And remember if you or anyone you know might be we’re ready to franchise your business, please contact us at bigskyfranchiseteam.com. Thanks for tuning in and we look forward to seeing you back here on our next episode.

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