Franchising (Part I)

The term ''franchising' has been used to describe various types of trading arrangements and opinions differ as to what truely comprises a franchise.

'Stern & Stanworth' (1988) took a broad view of the concept and identified 4 main contexts:

• Manufacturer - Dealer: Within this agreement, the manufacturer is the franchisor and the franchisee sells direct to the public. Many such franchises are found in the retailing of cars and petrol.
  
• Manufacturer - Wholesaler: The most notable examples are Coca-Cola and Pepsi-Co, who franchise the independent bottlers/canners who, in turn, sell to retail outlets.
  
• Wholesaler - Retailer: Known as 'Symbol Groups' (would be discussed in part ii)
  
• Business Format: The franchisor grants permission for the franchisee to sell the former's products or services. the franchisor also provides a proven method of trading, plus support and advice in setting up and operating the business.