Franchising is probably one of the most in demand type of business nowadays mainly because first the business is already “established” and second is due to the fact that it is less risky than creating a new one.

From big and known fast food chains to small food kiosk, more and more Filipinos are encourage to join franchising.. a great outlet to invest money.

But before you invest to franchisng, here’s are the basic information about franchisng that you MUST know:

• Franchising- It is a type of business by which a franchise is granted the right to engage in the business of offering, selling or distributing goods and services under a marketing plan  or system prescribed in substantial part by a franchisor and which is substantially associated with the franchisor’s trademark, name, logo and advertising.
• Franchise- The kind and the name of the business that the franchisee adapts.
• Franchisor- The owner or operator of the franchise
• Franchisee- The one who bought the franchise.
• Royalty Fee- This is the fee paid of the franchisee to the franchisor for the continuous used of the trademark and services of the franchise.
• Franchising Fee- This is the initial pay for purchasing a franchise which includes the terms of use of the franchise, training, etc
• Advertising Fee- Payment for the advertisement and promotions of the franchise
• Franchise Agreement- this is the written agreement between the franchisee and the franchisor regarding the terms and conditions of the franchise. The agreement is witnessed and observed by lawyers of both sides. It is most common for a seven-year franchise contract. 
• Operational Agreement- This is the written form of agreement, witnessed and observed by a lawyer, about the agreement between the franchisee and the franchisor method of operation.
• Master franchising- This is most common for big business franchise.  This is  model of multi-level franchising wherein the master franchisor sells the development rights in a particular geographic market to a master franchisee, who, in turn, sells individual or single-unit franchises within the territory.
• Initial Investment-The total capital paid for the franchise which includes franchise fee, royalty, and other additional payments.
• Initial Term of Agreement- If typical revenue and expense scenarios hold, the franchisee should be able to recover his initial investment within the initial term of agreement.
• Territory- The geographic location of the franchise. The location of the franchise is often part of the agreement. The Franchisor has a say on where the franchise should be located.