Being able to run a restaurant successfully as an entrepreneur can be a long and difficult journey: you have to get known and make a name for yourself in order to win regular customers. One way to make this development more plannable is franchising. In this distribution system, the new entrepreneur enters into a contract with a larger, already established company.
The company, which is already well known on the market - the franchisor - sells the new entrepreneur a license to use their business concept, including related knowledge, marketing, logistics, and, of course, business design, including name and logo.
The new company - the franchisee - gets the permission and also undertakes to offer its products and services under the brand of the franchisor and is also trained by the franchisor.
As a rule, the franchisor demands from the franchisee a share of its turnover, often also an entry fee and a certain minimum investment in the new business. Sometimes the contract also provides for a participation in the marketing costs. The contract period is often at least 5 or even 10 years.
Franchising in gastronomy
In the hospitality industry, franchise models are widely used in street food and delivery services. The franchisor often places demands on the location and various structural characteristics of the individual restaurants. Their success remains part of the corporate responsibility of the franchisees.
The contractual use of the business design often goes as far as the design and equipment of the restaurant and the clothing of the staff. Not infrequently, minimum purchase quantities of the food to be sold are contractually agreed.