{"id":468,"date":"2017-04-06T10:06:01","date_gmt":"2017-04-06T10:06:01","guid":{"rendered":"http:\/\/wordpress.oneviewcrm.com\/franchise4u\/?p=468"},"modified":"2017-04-27T15:55:21","modified_gmt":"2017-04-27T15:55:21","slug":"what-is-franchising","status":"publish","type":"post","link":"https:\/\/www.franchise4u.com.au\/index.php\/2017\/04\/06\/what-is-franchising\/","title":{"rendered":"What is Franchising"},"content":{"rendered":"<p>Franchising is defined by the ACCC as \u201ca business system. It involves one party (the franchisor) granting another (the Franchisee) the right to operate a replicated franchise business under that trade name and use established management, marketing and operating procedures. In return the Franchisee commits to paying the franchisor a capital investment, ongoing fees and complying with franchise procedures\u201d.<a href=\"#_ftn1\" name=\"_ftnref1\"><sup><sup>[1]<\/sup><\/sup><\/a><\/p>\n<p>Franchising is regulated under the Franchising Code of Conduct, an industry code mandated under the Trade Practices Act 1974.<\/p>\n<h1>Franchising Common terms<\/h1>\n<p><strong>Franchisor<\/strong> &#8211; a person who grants a franchise or otherwise participates in a franchise as a franchisor to licence the right to operate the business under the trade name and in accordance with the established operating system.<\/p>\n<p><strong>Franchisee<\/strong>\u2014a person to whom a franchise is granted or otherwise participates in a franchise as a franchisee.<\/p>\n<p><strong>Prospective franchisee<\/strong>\u2014a person who deals with a franchisor for the right to be granted a franchise.<\/p>\n<p><strong>Multi-site Franchisee<\/strong> &#8211; a Franchisee who owns and operates more than one site or territory across the same brand or possibly over several different franchise brands.<\/p>\n<p><strong>Franchise Fee<\/strong> &#8211; the initial fee paid by a Franchisee to the franchisor for the right to operate the franchise.<\/p>\n<p><strong>Franchise Royalty<\/strong> &#8211; the ongoing fee the Franchisee pays the franchisor for ongoing assistance and support; usually calculated as a percentage of weekly sales.<\/p>\n<p><strong>Marketing Levy<\/strong> &#8211; the ongoing levy the Franchisee pays into a marketing fund, the franchisor uses for marketing of the brand; usually calculated as a percentage of weekly sales.<\/p>\n<p><strong>Franchise Agreement <\/strong>&#8211; for an agreement to be a franchise agreement under the code it must have the following four elements:<\/p>\n<ul>\n<li>An agreement between the parties, which may be written, oral or implied;<\/li>\n<li>A grant by the franchisor to the Franchisee of the right to carry on the business;<\/li>\n<li>Substantial or material association with a trademark, advertising or commercial symbol; and<\/li>\n<li>Agreement by the Franchisee to pay the franchisor, or an associate, an amount in return for the grant of these rights and usages.<\/li>\n<\/ul>\n<p><strong>Disclosure Document<\/strong> &#8211; the document which provides detailed information about a franchise and is required to be given to potential and existing Franchisee\u2019s by the franchisor, at various stages in the franchise relationship.<\/p>\n<p><a href=\"#_ftnref1\" name=\"_ftn1\"><\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Franchising is defined by the ACCC as \u201ca business system. It involves one party (the franchisor) granting another (the Franchisee) the right to operate a replicated franchise business under that trade name and use established management, marketing and operating procedures. &hellip; <a href=\"https:\/\/www.franchise4u.com.au\/index.php\/2017\/04\/06\/what-is-franchising\/\">Continue reading <span class=\"meta-nav\">&rarr;<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[4],"tags":[],"class_list":["post-468","post","type-post","status-publish","format-standard","hentry","category-articles"],"acf":[],"_links":{"self":[{"href":"https:\/\/www.franchise4u.com.au\/index.php\/wp-json\/wp\/v2\/posts\/468","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.franchise4u.com.au\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.franchise4u.com.au\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.franchise4u.com.au\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.franchise4u.com.au\/index.php\/wp-json\/wp\/v2\/comments?post=468"}],"version-history":[{"count":3,"href":"https:\/\/www.franchise4u.com.au\/index.php\/wp-json\/wp\/v2\/posts\/468\/revisions"}],"predecessor-version":[{"id":486,"href":"https:\/\/www.franchise4u.com.au\/index.php\/wp-json\/wp\/v2\/posts\/468\/revisions\/486"}],"wp:attachment":[{"href":"https:\/\/www.franchise4u.com.au\/index.php\/wp-json\/wp\/v2\/media?parent=468"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.franchise4u.com.au\/index.php\/wp-json\/wp\/v2\/categories?post=468"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.franchise4u.com.au\/index.php\/wp-json\/wp\/v2\/tags?post=468"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}