1. Introduction
There are several ways to start a business, including finding and running a new business, buying an existing business, or buying a franchise, etc. Nowadays, buying a franchise is the most commonly used form. Under a franchise agreement, a franchisor undertakes to grant to the franchisee a license established in accordance with the procedure, for the use of its intangible assets such as the firm's name, trademarks or service marks, industrial design, packaging, as well as business management systems, planning, communications, and principal guidelines on the procurement of goods and services. While a franchisee undertakes to conduct its activities in accordance with a system and cooperation program developed by the franchisor, as well as to pay proper fees or royalties. The franchise business allows the franchisee to operate under the franchisor's trademark and to bring its business model into the market in line with the franchisor's standard and benchmark.
There are three types of franchise, depending on the branch:
- Product franchise /selling or distributing products manufactured by the franchisor using the franchisor's trademark/;
- Manufacturing franchise / transferring the right to use the technology by providing raw materials to the manufacturer and ultimate producer who own the trade secrets of the production of the raw material and technology registered in the Intellectual Property Office/;
- Service franchise /granting the right to the engage in certain types of activities along with trademark to the franchisee/.
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The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.