Franchising: in the rays of someone else's business glory. Franchise purchase agreement: features, important points of conclusion

First, you should understand such a thing as a franchise. The word itself can be translated as "benefit". One company leases the trademark of a large company. An agreement is concluded between firms, a completed sample of which can be downloaded. This example will help to conclude a model agreement with a franchisee.

The subject of the contract is the rights to use the brand, which are leased for a certain period. This includes the company name, service mark, trade secrets, and so on. This is the object of the contract. The parties to the agreement are commercial organizations in the form of a legal entity and private entrepreneurs (IP).

What happens

There are several types of franchising:

1. Business. This is when not only the right to sell services and goods is acquired, but also a license for this business. In this case, the franchisee undertakes to train employees in accordance with the requirements of the copyright holder, use a certain interior and other corporate requirements, up to the uniform and behavior of employees.
2. Commodity. The lease is for the right to sell goods under a particular brand name.
3. Service. Leasing the right to service products of a certain manufacturer.
4. Industrial. Gives the right not only to sell goods, but also to produce them.

In business cooperation, the franchisee is obliged to use a certain interior and other corporate requirements, up to the uniform and behavior of employees.

The characteristics and features of the contract depend on the type.

What is indicated

• Contract number.
• Conclusion date.
• Place of detention.
• Details of each party to the contract.
• The order of cooperation.
• Terms of termination and obligations of the parties.
• Additional agreements.
• Applications.

This document gives the franchisee all (or most) of the rights holder's options. This is included in the franchise fee.

How to issue

Registration of a franchise agreement is a mandatory procedure that a company acquiring the rights of another must go through. It takes place in Rospatent and takes about two months. If the registration is successful, Rospatent sends a package of documentation to the right holder confirming that the rights were successfully transferred to another company.

Royalty and lump sum

These are the key elements of the franchise agreement. The royalty is a monthly payment for the right to use the copyright to the company's intellectual property. Such payments are of a regular nature, and their amount is negotiated by the parties in advance and recorded in the document.

Royalty can be of several types:

• Percentage of margin.
• Percentage of turnover.
• Fixed fee.

A lump-sum contribution differs from a royalty in that it is paid as a lump sum. Usually this is a payment that pays for the costs (manufacturing of promotional products, preparation of documents and a franchisee package, a consultant's visit to the place of business establishment, assistance in marketing research, selection of a place for business, advice on legal and business issues).

Franchises of well-known brands involve the payment of both a lump-sum fee and royalties. Sometimes you can find options with only one of these forms of payment.

Nuances

There are features of signing such contracts for the transfer of exclusive rights. So, if one of the rights specified in the document expires, all provisions that relate to this right cease to be valid. The rest continue to operate.

The franchisor cannot change the price during the validity of the contract (unless it is specifically stipulated in the contract). But additional conditions can be entered under which the user transfers part of the rights to a third company (for example, the primary right to buy out a business upon completion of the franchise agreement).

Finally

A franchise sale and purchase agreement can help start-up companies earn their first capital. Preparation for the conclusion of such an agreement must be thorough. It is important to study all the conditions and understand whether their acceptance is acceptable. A commercial franchise agreement is a good solution in many cases, but whether it will be more profitable than starting your own business is something to seriously consider.

A commercial concession agreement is an agreement according to which the right holder must provide the entrepreneur for a fee within the established timeframe with the opportunity to use the trademark, as well as other rights specified in the transaction.

It is thanks to him each party can only do what the official document specifies.

Are there any differences between a franchise agreement and a commercial concession agreement?

Registration with Rospatent

How is a franchise agreement registered with Rospatent?

Previously, it was repeatedly stated that the contract is concluded only in writing.

Moreover, in order to make it must pass a series of stringent requirements..

You need to go to the Federal Tax Service of the Russian Federation and register there.

After this procedure, the entrepreneur's road lies in Rospatent.

The main goal is establish requirements for the appearance, possible changes and termination of the right to use the trademark.

If the contract contains all sorts of know-how, then only the document that does not contain any secret data is registered.

What is the cost of this procedure? For one trade brand, you must pay a state duty. Her size - 10,000 rubles. If any additional evidence is required, then for each you need to pay 8,500 rubles.

Change and termination

The Civil Code of the Russian Federation in chapter 54 establishes all the rules for terminating contracts. According to him, only the owner of the trademark can terminate such a document. If the contract is open-ended, then the franchisee, if necessary, can make a request to exit the business.

This must be done six months before the decision. If an urgent document was concluded, then the time for this is significantly reduced - the application is submitted in two weeks. There are also contracts with the possibility of termination unilaterally. But since the franchisor does not benefit from such actions such conditions are rare these days.

It also happens that the contract can change. In this case, the law establishes the payment of state duty. It is equal to 1,500 rubles. If the document requires an expansion of activities, then for this also in paid 1,500 rubles, but moreover, another 8,500 rubles are added for each trademark included in the contract.

Conclusion

Knowing all the intricacies of a commercial concession agreement, you can be sure of entering into cooperation only with the best company. In doing so, you can advise those who seek help in clarifying.

But what is it? If you look, it is present in almost all sectors of our society. It is with its help that the relations of the parties that are associated with the transfer of intellectual property rights are fixed.

What are the basic rules for drawing up a franchise agreement, and what are the main mistakes an ordinary businessman faces?

What does a franchise agreement look like from the legal side?

The legal glossary of Russia does not include such a concept of doing business as franchising. But the principle of doing business according to this system is very common throughout the country.

The main goal pursued by a franchise agreement is that one of the parties, which has an exclusive package of copyrights, a certain reputation and business experience, transfers all its knowledge, experience, name and other objects of the company to the other party for business activities.

For the services rendered, a fixed fee or remuneration is charged, which is negotiated in advance, and paid within a strictly specified period.

To put it simply, when opening your own franchise business, after the conclusion of documents, an entrepreneur can call his institution a well-known name, completely copying the style and interior, menu, recipes and even staff uniforms. In addition, the franchisee has the right to use the help of the company's management, lawyers and marketers at any time.

It turns out that at first glance, everything is very simple: an entrepreneur enters into a franchise agreement, in return he receives a package of services and legal assistance. In addition, to better focus on the topic, you can find a franchise agreement, read it carefully and get to the bottom of it.

But still there are a number of requirements:

1. The document can be concluded only between business entities. This means that if a businessman failed to register his activity as an individual entrepreneur, he will no longer be able to conclude a franchise agreement.
2. A franchise agreement simply cannot be free, because you will need to pay for the services. It is better that the percentage of reimbursable payments or a certain amount be agreed in advance and clearly spelled out in the contract.
3. The franchise agreement must be registered with Rospatent. In the event that the partners have disagreements, the franchising and the commercial concession agreement may be determined as invalid.
4. The owner of the company's unique rights provides almost everything necessary for the normal existence and development of a new partner. Of course, the franchise agreement does not provide for the supply of raw materials or utensils, for example, but the commercial concession agreement provides for instruction, technical assistance, legal assistance and control of goods.
5. But the future partner also has responsibilities. According to the franchise agreement, he must use all the resources provided to him wisely. In addition, he is obliged to qualitatively use all the information received, but not to disclose production secrets.

But, despite all the warnings, there will still be many loopholes and controversial points in the contract - it will not be possible to avoid this in any case.

What should be included in the document?

A well-written franchise agreement must contain the following items:

1. The very first is a trademark. The franchise agreement must be protected to the maximum in all categories that are used. If under one trademark the franchisor both produces food products and provides advertising services, then the trademark must be protected in both class 43 and class 35. This gives certain guarantees to the right holder and the second participant when concluding documents.
2. Unique rights to develop a certain territory. Many young entrepreneurs are very afraid of the difficulties associated with starting their own business, because of the risk of burnout or suffering from competition. But when concluding a commercial concession franchising agreement, the entrepreneur at least will not compete with the same company with which the agreement is concluded. But there is another problem here: a subordinate company may want to develop its line based on the knowledge gained. In this case, Rospatent will simply refuse to process the documents.
3. The issue of limiting competition. According to the franchising commercial concession agreement, it is allowed to limit competition between the two parties entering into the document. This is carried out immediately on several points: the object, territory, time and subject of the contract. This means that the franchisee is no longer able to open similar establishments during the validity of the documents or after the expiration of the agreement.
4. Supply. Most often, a franchise agreement provides for the purchase of dishes, food and all necessary products only from trusted suppliers who have been cooperating with the main company for a long time. But most franchisees have their own connections, trusted companies and great deals. Therefore, it is very important to indicate this fact in the papers and clearly regulate it. It is important to understand that the main company puts forward such requirements not out of harm, but to fight for the quality of the products of the company it represents.
5. Renovation and renovation of the franchise area. As the sample franchise agreement proclaims, during the first year (or several years) no concept and color scheme will change.
6. Education. According to the principles of European contract law on commercial agency franchising and distribution, the parent company is obliged to provide assistance in improving the skills of employees of the subordinate establishment, as well as systematically check their level of knowledge.
7. Reporting. It is very important to correctly and accurately comply with all the rules prescribed in the contract. Otherwise, you are in danger. Every self-respecting franchisee always clearly indicates the requirements, under which you are not afraid of any sanctions.
8. Assignment of property, objects or the whole business to another person is possible.
9. Termination of an agreement. The conditions under which the contract can be terminated are clearly limited by the legislation of the Russian Federation. But there is one aspect: only a large company that signed a contract has such a right.

Hello, dear readers of the business magazine "site"! In this article, we will detail what is a franchise and how does it work , and also explain the essence of franchising in simple words.

Many, deciding to start their own business, are faced with such a form as franchising (franchise business). But aspiring entrepreneurs have little knowledge and a vague idea about this way of organizing their business.

From the article it becomes known:

• What is a franchise and franchising in business - what are their differences;
• What kinds and types of franchises exist;
• What are the advantages and disadvantages of a franchise business;
• What are examples of highly successful and profitable franchises.

The information provided in this article will be useful both for those people who are just thinking about starting their own business, and for those who want to expand their business.

So, let's begin!

Franchise and franchising: what is it, what is the difference, what are the pros and cons of opening a franchise business - we will talk about all this in this issue in simple and understandable words

The word "franchise" comes from the French franchise, which means "favor" and "privilege".

Franchise ( from English. A franchise is a type of agreement under which one party transfers and another acquires the rights to a business model, use of technology and trademarks.

This term also has a synonym - commercial concession , however, it is used less frequently.

1.1. What is a franchise in simple words - a description of the term + the principle of operation on a real example

If we reformulate this definition in such a way that it is even more understandable, then franchise is the purchase of a right to open a business under the brand name of a well-known brand. At the same time, they use not only a trademark, but also technologies - both production and sales, as well as the concept of doing business.

Thus, an actually ready-made business is bought, the payback and profitability of which have already been tested in practice.

Franchisor and franchisee - who is it?

The party that buys the right to sell goods and services under a certain brand is called franchisees. The party selling such a right is called franchisor.

How does it work in practice?

For example, someone Andrei would like to start working for himself and do business. For this, he either.

After collecting some money, Andrey decides to buy a fast food restaurant franchise. So he acquired the status of a franchisee.

Having organized such a restaurant in his city, Andrei soon began to receive income that he did not have while working for other entrepreneurs.

Now he can open a whole chain of such fast food restaurants in his city.

1.2. Related terms related to franchising

In order to better understand this issue, you need to know other terms that are directly related to franchising and franchising.

Despite the fact that in our country the first franchise agreements began to be concluded relatively recently, in the world this common practice - and there is generally accepted terminology that makes such contracts and relationships between franchisees and franchisor as clear and transparent as possible.

First of all, since a franchise is understood as the transfer of a license, you need to know what it is.

In this case license is the transfer of rights held by the franchisor (know-how, technology, software, etc.).

At the same time, know-how is any information (related to production, product sales, business organization, etc.) that has commercial value, since it is known only to their owners.

That is, under know-how refers to the secrets of doing business or production, on which this or that business is built.

Documents by which the right to use a particular trademark is transferred and purchased can be called differently, while having the same meaning:

• franchise agreement;
• license agreement;
• commercial concession agreement.

When such a right is bought, the buyer (or franchisee) makes what is known as lump-sum fee is a payment for the purchase of a franchise . If we are talking about commodity franchising, then instead of paying a fee, the contract may provide for purchase of a specific inventory.

Often the contract is concluded in such a way that it is periodically required to be renewed. Then a lump-sum fee is paid each time the contract is renewed.

In addition to the lump-sum fee, the franchisee must pay royalty .

What is royalty in a franchise - a description of the term

Under royalty understand those payments that are periodic and payable throughout the term of the franchise agreement. These can be fixed amounts or a certain percentage of the business's profits.

In commodity franchising, periodic purchases of goods act as royalties.

When the contract is signed, the franchisee receives franchise package . It can be like in printed form, as well as in electronic. Such a package includes all the documents and materials with which the franchisee can easily and quickly start a business.

The franchise package must include:

• franchise policy;
• business management guide;
• corporate identity standard passport;
• all necessary legal documents.

Manuals necessary for the correct work of personnel, software, etc. may also be attached.

The franchisor is no less interested than the franchisee in ensuring that the set of documents is as complete as possible - after all, the reputation and popularity of the entire business depends on the correct organization of the business under its trademark.

Franchisers who value their business reputation take a very responsible approach to the formation of a franchise package.

Take note!

A person who wants to become a franchisee and is looking for the most interesting offer can familiarize himself with companies offering to conclude a franchise agreement on the relevant resources with complete catalog of franchises .

You can always find information both about the companies themselves and about the cost of concluding an agreement, lump-sum and periodic contributions, the amount of investments required to start, as well as contacts where you can contact company representatives to discuss the details of the transaction.

A novice businessman can either simply purchase a franchise and open a business on it, or master franchise, according to which he will become the sole owner of the right to conduct his chosen business in a certain territory (for example, in a city, region, district, etc.).

"Franchise" and "franchising" - what is the difference between these concepts?

2. Is franchising and franchising the same thing or not?

Very often people who do not have an economic education confuse the concepts "franchise" and "franchising". But to be able to distinguish between these two concepts is necessary - especially for those who want to conclude a franchise agreement.

Under the term "franchise" means the very acquisition of the right to sell goods or services under a certain brand name.

Often the word "franchise" is replaced by "franchise package". Although, in fact, the franchise agreement is first signed, followed by the receipt of the company's franchise package. The composition of the franchise package is strictly specified in the contract and can be discussed when signing it.

Franchising: what is it - an overview of the concept in simple words

Franchising is the process of creating, building and running a business on the terms of a franchise agreement.

Thus, the franchise acts as the subject of relations between the franchisor and the franchisee, and franchising means doing business on the terms of the franchisor.

What are the franchises - 7 main types and types

3. Types and types of franchises - 7 main varieties

Since doing business under a franchise agreement has been used for quite a long time, several different types of franchises have developed. They may differ in the degree of involvement in business management by the franchisor, in the form of payment for the franchise agreement, in the place of manufacture of products that the franchisee sells, etc.

Thus, everyone who would like to work under a franchise agreement can choose the most suitable option for themselves.

Type 1. Classic or standard franchise

This is the most used franchise in the world. As a rule, such an agreement implies the payment of a lump-sum fee, as well as the presence of periodic deductions in favor of the franchisor.

At the same time, the franchisor has the right to control the process of doing business of the franchisee and make its own adjustments. It can also verify the compliance of the business built by the franchisee under the license agreement with the requirements, rules and codes of the trademark.

Type 2. Free franchise

On the territory of the Russian Federation, it is this form of commercial concession that has received the greatest use.

A distinctive feature of the free franchise- This is a low royalty rate and greater freedom of action for the franchisee.

Thus, the entrepreneur is practically not controlled by the franchisor and has the opportunity to run his own business and develop it independently.

Type 3. Import-substituting franchises

In recent years, due to the introduction of economic sanctions in relation to Russia, it has become increasingly popular purchase of import-substituting franchises . The demand for them is explained very simply - consumers in our country are accustomed to goods and products of European production, which are of high quality.

Since the import into our state and the sale of some of these goods and products is now prohibited, Russian entrepreneurs are striving to enter this market and offer consumers similar goods, but made in the Russian Federation.

Thus, when buying a franchise, the technology for the production of certain goods and services is acquired, and the production itself takes place on the territory of our country. This is very profitable and allows not only to provide our citizens with the things and products they need, but also to receive good profits from this.

Type 4. Silver franchise (turnkey business)

In this case, we are talking about buying really ready business, in the creation and promotion of which you do not need to invest time and money. The owner of a particular trademark independently opens a branch of his company in a particular city, and then sells this business to a franchisee. As a rule, in this case there are monthly payments - percentage of affiliate profit .

This is a very convenient way to start your own business for those who do not have much entrepreneurial experience. First of all, since there is no possibility of making a mistake at the stage of opening an enterprise, and the possibility of a created business not meeting the trademark standards is also excluded.

When buying a silver franchise, you can immediately start working and earning income.

Type 5. Business for rent

Some franchisors prefer rent a business. In this case, the benefit of the franchisee is that he does not need to create and build a business on his own, and the benefit of the franchisor is the ability to receive monthly income without spending time managing the business. By the way, we already wrote about that in one of our publications.

At the same time, the franchise agreement stipulates what percentage of the income the franchisor receives, and what percentage goes to the franchisee. This is a mutually beneficial cooperation and an option suitable for aspiring entrepreneurs.

Type 6. Golden franchise (master franchise)

Those people who already have experience in running a business and who want to work "big" can purchase the so-called "master franchise" .

By concluding such an agreement, the franchisee receives monopoly rights for business in a certain region or city.

Of course, the cost of such a license is very high, but in the future these costs will definitely pay off - after all, the entrepreneur will be able to open a network of companies in this region and remain the only representative of the trademark in the territory designated in the contract.

Type 7. Corporate franchise

This commercial concession agreement is ideal for inexperienced businessmen. It assumes that the brand owner will control the development of the business and be able to run it on their own terms.

Opportunities to make any changes for the franchisee are small. However, it will be easier for a beginner to learn how to do business under the guidance of an experienced team of professionals.

When choosing the type of franchise, you need to evaluate your financial capabilities, ambitions and experience in doing business. In any case, with such a variety of franchise types, there is always a way out - even for those with small start-up capital and experience.

Franchise business - the main pros and cons

4. Advantages and disadvantages of a franchise business

People who would like to become entrepreneurs by buying a franchise often ask themselves the same questions:

• how cost effective is it?
• Does it make sense to invest money, effort and time in franchising?
• What are the advantages and disadvantages of such a business?

To answer these questions, you need to think about pluses and cons starting a franchise business.

Pros (+ ) starting a business with a franchise

There are five main advantages of franchising for the franchise buyer.

Plus 1. Minimal risk when doing business

When an entrepreneur decides to start a business, there is always a chance of failure- the attractiveness of a product or service for consumers may be incorrectly assessed, etc. However, in the case of franchises, this is practically impossible- after all, a novice businessman receives complete instructions for successful business development.

As a result, if everything is done according to the instructions, the profit will not be long in coming. The path that the franchisee has to go through has already been traveled by the owner of the trademark - and it is guaranteed to bring income.

Plus 2. Brand awareness

A lot of money if a company is created "from scratch" , goes to its promotion and brand advertising. When it comes to a franchise, such expenses will not be required - after all, the trademark is already well known to potential consumers of a product or service.

In this case, the company already has a positive reputation, so when working, the franchisee can use an image that has already gained people's trust and is known in the market.

Plus 3. Quick profit

Since there is no need for advertising and time to promote the company, the first profit will be received very soon after the opening of the enterprise under a franchise agreement. And it's not just beautiful words, a proven fact.

So, when McDonalds opened in Moscow, on the first day of its work several thousand people queuing up for this place before his discoveries.

Therefore, there is no need to worry about how to live the first time while the business is at the development stage - the first income will be received very quickly. In a separate article, we also wrote what ways to earn extra money are possible in your free time from your main job.

Plus 4. Minimal spending on advertising campaigns

The lion's share of expenses when opening any company falls on advertising. In addition, it is not so easy to find really good specialists who can attract the maximum number of consumers to the company. Moreover, success is largely determined by the extent to which it is able to retain its customers.

A franchise agreement allows you to avoid all these costs and headaches for a businessman. Franchisors supply their franchisees with a complete package of documents for starting and running a business, and this package includes complete recommendations for running successful advertising campaigns and all kinds of events.

Plus 5. Ability to receive support and receive training

Usually, starting your own business, a person finds himself alone with this situation. He has no one to ask for help or advice. When concluding a commercial concession agreement, everything is different - not only he himself is interested in the success of the franchisee, but also the owner of the trading network. That is why the franchisee will receive maximum support and, if necessary, complete training. As a result, he will be able to successfully conduct his business and receive the desired income.

In addition, most franchisors offer ongoing supervision and assistance from qualified lawyers in situations where such assistance is needed.

Thus, with the full support of the franchisor, the business will develop very quickly, and the franchisee will make a profit. But there are also disadvantages of starting a franchise business.

Disadvantages (− ) of Franchise Business

There are also five main ones.

minus 1. Lack of “self-maneuver” capability

As a rule, all actions of a novice entrepreneur are strictly regulated, and he must adhere to the rules and codes that the franchisor has provided him with.

A businessman does not have the opportunity to show his creativity in the conduct of his business - he must coordinate everything with the owner of the trademark.

Minus 2. The need to make periodic payments or purchase goods and equipment

If the entrepreneur does not work under a franchise agreement, then he can appropriate all the income for himself and spend it as he wishes. And the franchisee must make periodic payments(usually once a month) and, in some cases, purchase goods or equipment from the brand owner. It - additional expenses , which will need to be deducted from income throughout the duration of the franchise agreement.

Minus 3. High price for franchises

Despite the fact that starting your own business under a franchise agreement is much easier than without one, franchises cost a lot. This is especially true for well-known and promoted brands and master franchises.

Minus 4. Control by the brand owner

Not every entrepreneur will like that someone controls his every step. And it is impossible to avoid this control when buying a franchise. The franchisor will oversee all business processes to make sure that the franchisee is doing everything possible to extract maximum profit from the business.

Minus 5. The impossibility of applying a creative approach

The franchisee has no right to independently choose the direction of development of his business or show creativity in the development of marketing and other programs. It must strictly follow the development program proposed by the franchisor.

Thus, franchising, like any other form of business, has not only advantages.

The table below lists the main criteria (parameters) for comparing the opening of a franchise business and a traditional business:

The table shows that the main differences between a franchise business and a “regular” traditional business are the timing of business promotion, advertising costs, risks, initial investment of funds and freedom to do business.

Popular franchises for small and medium businesses

5. TOP 5 franchises for those wishing to become a franchisee

Before deciding to conclude a franchise agreement, you need to look at real examples of such a business. It is worth paying attention to the companies included in TOP-5 the most popular brands offering the conclusion of such an agreement.

1 place."McDonalds"

This company is known, without exaggeration, all over the world. The owners of this company came up with the idea of ​​franchising, deciding to beat the competition and expand their catering chain outside of America.

However, when thinking about acquiring a franchise from this company, you need to prepare for a significant investment at the initial stage. To start this business, you need not only to purchase a franchise for 45 000 dollars, but also have an initial capital of at least 950 000 dollars. Not every novice businessman can afford it.

Most often, franchises are bought by wealthy businessmen as an investment.

2nd place. Popular chain of supermarkets "Perekrestok"

These supermarkets sell products for those who prefer high quality, freshness of products and good service. But in order for this franchise to bring its purchaser a stable good income, the supermarket must be located in a busy and densely populated area of ​​the city, have parking and convenient access roads.

In addition, the franchisor places high demands on the area of ​​the premises in which the supermarket will be located, on internal communications, lighting, and even on window dressing.

3rd place. Subway Restaurant

This is an ideal option for start-up entrepreneurs, because the cost of the initial fee for a franchise agreement is 7 500 dollars. In addition, the franchisor is happy to provide its partners with various bonuses and benefits, reduce the lump-sum fee and provide comprehensive support in resolving legal and marketing issues.

It is for these reasons that the network of these restaurants in Russia is constantly growing. Currently operating approximately 700 such restaurants in different regions of the country.

4th place. "Coffee to go"

Coffee to go coffee houses deservedly occupy the fourth place in the ranking. Since the cost of a franchise is only from 100 to 400 thousand rubles. Many people who want to open their own business on the basis of a franchise agreement opt ​​for this particular brand.

In addition, this is a very popular destination, because there are more and more lovers of high-quality and delicious coffee, as well as those who spend most of the day on the run and cannot stop at a cafe to drink coffee.

5th place. "Orange Elephant"

In fifth place in the TOP-5 is the franchise of the chain of stores with goods for children's art "Orange Elephant". The dynamics of the development of these stores is impressive, in addition, this network has not yet been promoted to the maximum and is not present in all cities. And this means that franchisees have a greater chance of success with relatively little competition.

At the same time, the network not only sells, but also manufactures goods for children's creativity presented in its stores. Today the network has franchisees in America, Turkey, Israel, Iceland and many other countries.

Thus, each novice merchant can choose the franchise that is right for him - both in terms of the specifics of the activity, and in terms of cost and requirements for initial capital.

6. FAQ - frequently asked questions regarding franchises

There are questions that are asked most often by those who wish to conclude a franchise agreement.

Question 1. How to choose the right franchise?

First of all, you need to decide on the amount that the entrepreneur is willing to invest in his business at the initial stage. Today you can find both inexpensive franchises and those that require very large financial investments.

There is no need to overestimate your capabilities, because the success of a business largely depends on this.

Having chosen several franchisors in the right price category, you need to study all these brands and answer the following questions for yourself:

• what are they doing (what goods or services are offered);
• what is the policy of these companies;
• what kind of advertising they do.

Based on this, you need to focus on one company - the most suitable for its specifics. This is very important, because a businessman should be happy to deal with his “brainchild”. There is no point in turning into the business of your life what you do not have a soul for.

Then you need to contact the representatives of the company and discuss all your questions regarding the conclusion of the contract. If everything suits you, then the deed is done and the franchise has been chosen.

Question 2. Is it worth opening a franchise business if there is no experience?

One of the main benefits franchising is that it allows you to open your own business, even for those who had nothing to do with the business before.

It is safe to say that in the case of a franchise, the risks for the entrepreneur are minimal. This is due to the fact that, after the conclusion of a commercial concession agreement, the trademark owner (franchisor) provides the novice merchant with a business plan and detailed instructions for creating and promoting a business. By the way, you can in one of our previous materials.

Thus, the franchisee not only receives a guaranteed income in the very near future, but also invaluable business experience.

Question 3. How much does a franchise cost and what does its cost depend on?

The cost of concluding a franchise agreement can be different.

The price depends on several factors:

• brand promotion;
• type of franchise for example, a master franchise will always cost much more than a standard franchise - but it will also bring large incomes);
• ambitions of the brand owner.

In addition, you need to take into account lump-sum and periodic payments in favor of the franchisor - they can also be attributed to franchise costs.

There are franchises for example, "Orange Elephant"), which stand relatively inexpensive, do not require very large material investments at the initial stage, but quite profitable for your own business.

And there are others, such as, for example, a franchise of a KFC fast food restaurant, where the initial payment is from 47 thousand dollars, and investments from 700 thousand $.

KFC restaurant franchise

Question 4. Is there a franchise without investments?

Turnkey business without investments- this is probably dream any budding entrepreneur. But is it possible to realize this dream?

Indeed, there are companies that offer to conclude a franchise agreement without the first - lump - sum payment. However, this does not mean that the business does not need to invest money. Franchisees will have to invest their own funds in building or renting premises, ordering advertising campaigns and paying salaries to employees. Thus, it is unrealistic to completely avoid costs at the initial stage.

In addition, any franchisor will require royalties, which are usually around 10 % of franchise income.

Therefore, in any case, you must not forget about the necessary expenses. But in the case of a franchise, the business will really pay off much faster than a regular one.

Question 5. What kind of franchise business can be opened in 2019 with minimal investment?

When deciding to open your own business under a franchise agreement in 2019, you need to remember about five most popular destinations , which are more likely to bring quick income:

• Internet sphere;
• the service sector and the provision of services;
• catering industry;
• trade;
• production.

There are franchises that are promising and promise quick profits to their franchisees:

• Multiwindows- a company that sells windows from different materials; initial payment - from 100 thousand rubles.
• TicketCom- a company that puts advertising on checks that are issued to customers when paying for purchases in stores; initial payment - from 150 thousand rubles.
• linguitania- a network of centers for the study of foreign languages, a lump-sum fee - 220 thousand rubles.
• STARDOG!S– catering outlets that sell hot dogs. The lump-sum contribution can range from 22 to 330 thousand rubles.
• Gift Calendar- a network that sells souvenirs and accessories for the holidays, requiring initial capital in the amount of 790 thousand rubles.

P.S. You can also check out profitable ones for beginners in one of our articles.

7. Conclusion + related video

In this way, concluding a franchise agreement - a real and fairly easy way to start your business from scratch. It is especially suitable for those who do not yet have experience in creating and managing a business.

In addition, in the process of organizing and running such a business, you can learn a lot from more experienced businessmen - brand owners.

Many successful entrepreneurs today started out by buying a franchise - and they were not mistaken with their choice. Anyone can do this, even without having a lot of money for a down payment!

The RichPro.ru team wishes its readers success in all their business endeavors! We are waiting for your assessments of this material, comments and thoughts on the topic of publication in the comments below. Thanks in advance!

Library

Irina Schukina, Startup Entrepreneurship Portal

Recently, the purchase of so-called franchises has been very popular among those who want to start their own business. buying licenses to do business under the name and control of a well-known firm.

The advantages of this type of opening a business are obvious: a ready-made business concept, a promoted brand, a certain place in the market, a developed network of partners and suppliers. To use these "benefits" it is necessary to conclude an agreement with the copyright holder. How to conclude it and what conditions must be specified, read in this article.
Franchising, commercial concession, franchise (from French franchir, “to release”) is a type of relationship between market entities, when one party (franchisor) transfers to another party (franchisee) for a fee (royalty) the right to a certain type of business using a developed business its management model. (Wikipedia).

Russian legislation does not contain the very concept of “franchise”, “franchising agreement”, therefore, for such types of legal relations, a commercial concession or license agreement is used. More often, a commercial concession agreement is used, which, in terms of meaning and content, fully corresponds to such a type of relationship as franchising.

Under a commercial concession agreement, one party (right holder) undertakes to grant the other party (user) for a fee for a period or without specifying a period, the right to use in the user's business activities a set of exclusive rights belonging to the right holder, including the right to a trademark, service mark, as well as rights to other objects of exclusive rights provided for by the agreement, in particular for a commercial designation, a secret of production (know-how). (Article 1027 of the Civil Code).

Consider the terms of such an agreement in more detail:

1. The Subject of the Agreement

The subject of a commercial concession (franchising) agreement is the very exclusive rights that are subject to transfer to the user: the right to a trade name, commercial designation, trademark, service mark, commercial designation, production secret (know-how).

The extent to which exclusive rights will be used is determined in the contract.

The condition on the subject is essential (mandatory) for the contract, without which the contract will not have legal force.

2. Parties to the agreement.

The parties to the agreement can be both legal entities and individual entrepreneurs.

3. Form of the contract.

The contract must be concluded in writing. In addition, the agreement will need to be registered with the Federal Service for Intellectual Property, Patents and Trademarks (FGU FIPS). If you neglect these requirements, the contract will be considered not concluded.

4. Reward (royalties).

Determining the amount and form of remuneration is an essential (obligatory) condition of the contract. The remuneration may be paid in the form of fixed one-time or periodic payments, deductions from proceeds, mark-ups on the wholesale price of goods transferred by the right holder for resale, or in another form provided for by the agreement.

5. Rights and obligations of the parties.

a) the copyright holder:

• transfer to the user technical and commercial documentation and provide other information necessary for the user to exercise rights under the contract;
• instruct the user and his employees on issues related to the exercise of these rights;
• ensure state registration of a commercial concession agreement;
• provide the user with ongoing technical and advisory assistance, including assistance in training and advanced training of employees;
• control the quality of goods (works, services) produced (performed, rendered) by the user on the basis of a commercial concession agreement, unless the agreement provides otherwise.

b) user:

• use, in the course of the activity stipulated by the contract, a commercial designation, trademark, service mark or other means of individualization of the right holder in the manner specified in the contract;
• ensure that the quality of the goods, works, services produced by him on the basis of the contract is consistent with the quality of similar goods, works or services produced by the right holder;
• comply with the instructions and instructions of the right holder aimed at ensuring that the nature, methods and conditions for using the complex of exclusive rights correspond to how it is used by the right holder (including instructions regarding the external and internal design of commercial premises used by the user);
• provide buyers (customers) with all additional services that they could count on when purchasing (ordering) a product (work, service) directly from the right holder;
• not to disclose production secrets (know-how) of the right holder and other confidential commercial information received from him;
• provide a specified number of subconcessions, if such an obligation is provided for by the agreement;
• inform buyers (customers) in the most obvious way for them that he uses a commercial designation, trademark, service mark or other means of individualization by virtue of a commercial concession agreement.

6. Restrictions on the rights of the parties.

These obligations (clause 5) must be performed regardless of whether they are specified in the contract or not. However, in addition to them, the parties may establish other obligations that, in their opinion, are necessary for the fulfillment of the terms of the contract. For example, the parties may restrict each other's rights by providing:

• the obligation of the right holder not to grant similar rights to other persons in a certain territory or to refrain from their own similar activities in this territory;
• the obligation of the user not to compete with the right holder in the territory covered by the commercial concession agreement in respect of entrepreneurial activities carried out by the user using the exclusive rights belonging to the right holder;
• the user's refusal to obtain similar rights under commercial concession agreements from competitors (potential competitors) of the copyright holder;
• the obligation of the user to coordinate with the right holder the location of the commercial premises used in the exercise of the exclusive rights granted under the contract, as well as their external and internal design.

It should be borne in mind that these conditions may be invalidated at the request of the antimonopoly authority if they contradict the antimonopoly law.

Also, do not abuse the opportunity to limit the rights of the other party. Thus, the following restrictions will be recognized as null and void, by virtue of which:

• the right holder has the right to determine the price of the sale of goods by the user or the price of works (services) performed (rendered) by the user, or to set an upper or lower limit for these prices;
• the user has the right to sell goods, perform work or provide services exclusively to a certain category of buyers (customers) or exclusively to buyers (customers) located (residence) in the territory specified in the contract.

7. Duration of the contract.

The contract may be concluded for a fixed period or without specifying such a period. In the event that the term is specified in the contract, the user within 3 years has the pre-emptive right to conclude a new contract with the copyright holder on terms no less favorable than the terms of the terminated contract. If the copyright holder violates this rule: refuses to conclude a new agreement or enters into an agreement with another user, the user will be able to invalidate this agreement and conclude a new agreement with him or demand compensation for the losses incurred.

10. Subconcession.

The agreement may provide for a condition on subconcession. This means that the user can not only use the entire set of rights under the contract, but also transfer it for a fee to other entrepreneurs and organizations. To do this, the user must conclude a commercial subconcession agreement with a third party. Such an agreement may be concluded for a period that does not exceed the term of the main commercial concession agreement.

8. Amendment of the contract.

As a general rule, the contract is subject to change in the event of a significant change in circumstances (unprofitability of the business, violation of the terms of the contract, etc.). You yourself can specify these circumstances in the contract.

Any changes to the contract will need to be registered with FGU FIPS.

9. Termination of the contract.

If the contract was concluded for an indefinite period, then each party has the right to terminate its execution. To do this, she needs to notify the other party 6 months in advance (you yourself can set the period in the contract).

Other grounds for terminating the contract are also possible:

• expiration of the term for which the contract was concluded;
• termination of the right to a trademark, service mark or commercial designation belonging to the right holder, when such right is included in the set of exclusive rights granted to the user, without replacing it with a new similar right;
• when the right holder or user is declared insolvent (bankrupt);
• in the event of the death of the right holder, if his heir does not register within six months from the date of opening of the inheritance as an individual entrepreneur.

If any exclusive right included in the set of exclusive rights granted to the user passes from the right holder to another person, such transfer will not be the basis for changing or terminating the commercial concession agreement.

10. Responsibility.

The right holder is responsible for the requirements imposed on the user about the discrepancy in the quality of goods sold by the user under a commercial concession agreement, along with the user.

The liability of the parties for violation of the contract is determined in a general manner (in accordance with Chapter 25 of the Civil Code), but for convenience, you yourself can specify this procedure (the amount and procedure for paying a penalty, compensation for losses, etc.). If these measures prove ineffective, you can resolve all your differences with the other party through arbitration proceedings.

A franchise agreement can not only give you the opportunity to start your own business, open an already successful business under a well-known brand with your favorite product, but also borrow business experience from a well-known company. So that this experience does not turn out to be negative for you, conclude an agreement on favorable terms and most clearly prescribe all the nuances. This will allow you not only to cooperate with a well-known brand, but also to avoid negative consequences.