When you enter into a shopping mall or a commercial complex almost anywhere in the world, one encounters many familiar shops, fast-food restaurants, clothing retail stores, and service providers of different kinds, mostly with familiar brand names that have attained worldwide recognition. Many of these enterprises usually do not belong to any of the large multinational chains but are, in fact, independently owned businesses of local entrepreneurs. So, how is it that small entrepreneurs around the globe are able to sell the same products, use the same trademarks, and have the same shop decoration and have employees dressed almost identically the same? Are these local entrepreneurs legally allowed to do this? Oh Yes!!! The answer is through the franchising system.
Although franchising as a concept has still not developed into an industry in Nigeria, it is a growing phenomenon of business organization and sales or services distribution world over, especially in the United States and the United Kingdom.
While the franchise business model will provide a sustained advantage for the franchisor and the franchisee, like a marriage, a franchise relationship can end poorly. A franchise “divorce” may produce long-term problems affecting the parties’ ability to conduct business. As in a dissolving marriage, the franchise dispute often centers on ownership: who gets what? The buyer (franchisee) or seller (franchisor) laments spending blood, sweat, and tears building a business only to have the other party claim title to what was built. At the dispute’s core is a clash over goodwill that frequently exposes glaring inconsistencies in the parties’ understanding of their relationship.
We at Franchise Business Development Services Ltd will help you understand the intricacies of franchising your business or buying a franchise, depending on your needs.