Today, more than 75 industries operate under the franchising format, according to the International Franchising Association. These businesses are adding jobs in a multitude of industries and are major contributors in the development of management and technical skills.
The IFA defines a franchise as “the agreement or license between two legally independent parties which gives:
- a person or group of people (franchisee) the right to market a product or service using the trademark or trade name of another business (franchisor)
- the franchisee the right to market a product or service using the operating methods of the franchisor
- the franchisee the obligation to pay the franchisor fees for these rights
- the franchisor the obligation to provide rights and support to franchisees
|Owns trademark or trade name||Uses trademark or trade name|
|Provides support||Expands business with the franchisor’s support|
|Receives fees||Pays fees|
NexGoal falls under the “Business Format” franchise. Business format franchises not only use a franchisor’s product, service and trademark, but also the complete method to conduct the business itself, such as the marketing plan and operations manuals. Business format franchises are the most common type of franchise.
This article on Entrepreneur magazine has more information on the basic lingo associated with franchising.