1.3. What are business plans needed for?

The term franchising (English: french; related to; French: frank, free) or concession sales refers to a business method. Franchising is also defined as a sales concept in which a franchisor provides a franchisee with, for example, the regional use of a business concept in return for payment. Franchising concepts are in principle growth concepts.

Three possibilities of self-employment in franchising can be distinguished.

1.       The franchisee takes over a business idea from a franchisor. They receive training and regular support. He is more integrated into the franchisor's distribution system than a mere authorised dealer. The franchisee sells his products or services legally independently. He pays a fee for the use of the "name or brand". This includes, for example, the use of uniform equipment, a uniform name and external appearance, a symbol or logo, a uniform distribution system and often joint bookkeeping. The franchisor checks the implementation of the concept and may give instructions.

2.       The franchisor has developed the franchise system, which serves as the basis of the joint business model. This is only seriously possible if the business idea has been tested and has successfully passed the practical test. Becoming a franchisor offers the chance to expand relatively quickly with one's own business idea. The franchisor should have developed a meaningful manual for the distribution of his business idea. To become a franchisor yourself, more is required than to run a single business successfully. Especially the financing of the business concept requires new know-how.

3.       In master franchising, franchise companies want to establish themselves in international markets. Since they do not have the cultural knowledge or the human and financial resources to do this on their own, they offer the "master franchise": The master franchisee receives a licence for an existing franchise system, whereby he does not become directly active as a franchisee, but strives to acquire further franchisees in this area (e.g. Germany). He does this on his own account and in his own name. This type of franchising is reminiscent of "snowball systems".