What is commodity franchising
Table of contents:
By commodity franchising is meant exclusively the sale of goods. This is the relationship that occurs between the franchised parties that participate in the business. In this case, special rights are transferred by the franchisor, and acquired by frachises. These rights are limited to a certain territory. They are put up for sale of those products that are produced within the franchisor’s brand.
Franchising Types
Franchising is distinguished in two ways. The first type involves the sale of products from the first manufacturer. Moreover, this product or product has a trademark. Franchisees specialize mainly in retail. This is due to the fact that in this type of franchising appears direct contact of the seller with the buyer.
The goods can be delivered by the franchisor in two ways: directly through the franchisee and through a third party. In this case, the main task of a third party is the distribution of products. Such a person may be:
- Agent.
- Distributor
- Similar representatives of commerce.
Thanks to this relationship scheme, you can increase the sale of goods. There is also the opportunity to sell products in those areas that are remote from the main ones. In addition, a material management system is provided that occurs at lower costs.
The interaction schemes of third parties and franchisors may be different. However, the key factor in these relationships is the following:
- Product.
- Mark.
- Uniformity.
- Corporate identity.
Thanks to this, the manufacturer becomes recognizable. Much attention is paid to the wide range that is offered to the buyer. In such situations, the following persons act as the franchisor: the manufacturer of the oil product, alcoholic beverage products, toys, and so on.
In the case when they talk about the second option of franchising, they mean the distribution of products by those companies that do not directly participate in the production process. However, they have long-term business relationships with a large number of suppliers. In addition, they have the ability to manage the assortment and form it.
