A franchise is an indirect trade partner located abroad and in charge of sale of goods/services.
PROS
CONS
PROS
- Franchises represent the company abroad and have or develop a client portfolio, as such knows and works with local languages, customs, cultures...
- Possesses the structure to hold and keep stock (warehouse...) and/or may take care of importation (administration, taxes, customs...) => legally obliged to sell/distribute the franchisers' goods/services (only?)
- Is usually exclusive to the company's goods/services and are the brand/image of the company abroad
- May be recognizable by clients internationally to provide the same type of goods/services
- Pay royalties to the franchiser for distribution/sale under a recognizable brand
- Is to implement commercial, financial, marketing strategies from HQ
CONS
- May negatively impact the franchiser if quality of service/sales is poor
- Distribution to final clients may be quite opaque to the company as the franchiser represents a third party between supplier and end client
- Are there results/obligations towards services/products/sales?