Let’s Talk About Franchising
“In the modern age the existing franchising format developed after World War II. This format is called the Business Format Franchising. It became common because people who came back from war demanded special privileges and rights in various services and sectors of the society.”
Franchising is nothing but a deal by which you can have the specific privileges and concessions in any business. This is not a new concept. Franchising has been in existence since times immemorial in one form or the other.In the ages gone by, certain people were given the privilege to construct buildings for the king, some were given the rights to build roads, some were told exclusively to tackle the conduct of the market. This is nothing but the concept of franchising, though in a crude form.
In the modern age the existing franchising format developed after World War II. This format is called the Business Format Franchising. It became common because people who came back from war demanded special privileges and rights in various services and sectors of the society.
However, as no system is perfect and always has some demerits associated with it, franchising also has had its downside. Many companies who are not given the benefit of franchising by the government find it very difficult to make both ends meet. All the more, some even reach the stage of insolvency because they are unable to gain special privileges and rights from the government’s side.
It is also a common occurrence that companies manipulate the rules and make it known to common people that they are the franchises, in one form or the other. As a result, people start investing in these companies with the end result that they have to incur huge losses once the things get straight.
Keeping all these things in view, IFA-the International Franchise Association was established in 1960 to bring about justice and evenhandedness in the franchise field. Existing rules were amended and new regulations brought into force so that no franchiser is able to cheat its franchisees.
Now, we have the FDD- the Franchise Disclosure Document that is used to provide correct and complete information to all the prospective franchisees. This reduces the occurrence of fraud cases to a minimum. However, we should not be complacent because companies and shrewd businessmen keep on manipulating things and find one or the other loophole to indulge in unhealthy practices. Continuous revision and up gradation of the regulations is therefore, the need of the hour.
Author - DeeKay
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