Franchising Conversion is a change in standard franchise relationships. Many franchise systems are developing by transforming independent companies in the same sector into franchise units. Franchisees adopt brands, marketing and advertising programs, a training system and critical customer service standards. In general, they also increase supply savings. The franchisor in this model has very rapid growth potential in terms of units and royalty revenues. Real estate professionals, florists, professional services companies, domestic services such as plumbing, electricians, air conditioners, etc., are examples of industries that make extensive use of the conversion franchise. Operating a franchise could be an ideal business for entrepreneurs with little experience, as 1) the cost of opening a franchise is low compared to a point-to-point bottom-up business, so franchisees need very little capital to get started; and 2) franchisees receive a lot of help because franchisors keep a close eye on their new franchisees. In general, the franchisor requires that the business model remain the same. For example, the franchisor will ask the franchisee to use uniforms, business methods and logos or logos specifically for the company itself. The franchisee must remember that he or she buys not only the right to sell the franchisor`s product, but also the right to use the successful and tested business process. Franchisors are required to make FDDs available to potential franchisees at least 14 days prior to signing.
If the franchisor makes major changes to the agreement, it must give the franchisee at least seven days to verify the franchise agreement concluded before signing it. While there are many advantages to investing in a franchise business model that has already been successful, there are also drawbacks. As with any investment you make, you should do your research in depth before making franchise purchase decisions. If you are considering buying into a franchise, you should contact an experienced franchise lawyer for additional support. If a company wants to gain more market share or increase its geographic presence at low cost, one solution could be to create a franchise for its product and brand. The franchisor is the original or existing company that sells the right to use its name and idea. The franchisee is the person who buys into the original business by acquiring the right to sell the franchisor`s goods or services under the existing business model and brand. The franchise agreement is a contract that generally consists of terms and conditions defining how one company (franchisor) agrees to make available to another party (franchise) the brand, services, modes of operation and other assistance in carrying out a similar transaction against a first payment, as well as a percentage of the income generated in the form of a monthly reintroduce charge (licence fee). The Brazilian Franchise Act (Law 8955 of December 15, 1994) defines the franchise as a system in which the franchisor grants the franchisee, against payment, the right to use a trademark or patent, and the right to exclusive or semi-exclusive distribution of products or services.