What does it mean to buy a franchise or a license?

Think McDonalds! Restaurants are not owned directly by the main company in the US but by franchisees who decide to 'own' a McDonalds restaurant rather than to start their own version of a hamburger restaurant.

How does it work?

You pay an initial fee and sometimes a portion of your profits to a franchisor. In exchange, you can use their branding trademark, a pre-developed system of doing business and all the necessary processes to sell the franchised products or services. You can also get ongoing support and help if you encounter problems, and are part of a larger network of similar businesses.

Why Buy a Franchise?

Besides access to an already established brand name and business, you get a proven system of operation and training in how to use it. Rather than setting up from scratch, you can avoid a lot of the mistakes start-up entrepreneurs typically make because the franchisor has already perfected the daily operations through trial and error and experience.

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