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Franchising

Franchising

Franchising is a relatively new business concept in East Africa, with many businesses having the potential to grow through franchising but not able to quite know where to start. Having undergone thorough training in franchising and after many years of experience in delivery of cutting-edge business development services, we are uniquely positioned to advise clients across Africa on international best practice in franchising and hand hold them to build their franchise networks or to acquire franchises of their choice.

Franchising is a system for selectively distributing goods or services through outlets owned by the franchisee. A franchise then is a grant of patent or trademark license, entitling the holder (the franchisee) to market particular products or services under a brand name, trademark and business systems owned by someone else (franchisor) according to prearranged terms.

The Franchisor is the company/individual owning/controlling the trademarks and the franchise systems and grants the franchisee the right to operate the franchise using the trade-marks, know-how and business systems. The Franchisee is the company or person granted by the franchisor the right to operate the franchise in return for payment of an initial fee and/or ongoing or management fee.

In Business Format Franchising the franchisor provides specific method/system for running the franchised business in addition to the patents/ trademarks. Product/Trade Name Franchising is a form of a corporate identity package with limited operational support. Licensing refers to grant of rights to use a brand's intellectual property (name, colors, manufacturing processes and trade secrets) without any technical support.

Tied System refers to a system where a manufacturer offers special distribution rights (franchises) to limited selected outlets, pay a lease on the property and works closely with the owners at local and national level.

Micro-franchising is a scaled-down franchise with a low enough price that low income people can afford. It is the systemization and replication of micro-enterprises, whereby small businesses are replicated by following proven marketing and operational concepts. It follows in the footsteps of micro financing, micro insurance, micro leasing and micro credit.

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