Franchising: A Model of Business Expansion

Franchising exemplifies a structured business expansion method where a proven system is licensed to independent operators.

Core Components

• Franchisor provides: brand, trademarks, operating system, training, ongoing support.
• Franchisee pays: initial fee + ongoing royalties (% of sales).
• Control: Franchisor sets standards for products, services, pricing, branding.
• Mutual Interest: Both parties benefit from brand consistency and customer satisfaction.

Examples

• McDonald's
• Walmart (some international ops)
• Pizza Hut
• Subway, 7-Eleven, Marriott, Anytime Fitness

Franchising enables rapid scaling with reduced capital risk for the franchisor.