There are four different types of franchise models. Namely Company Owned Company Operated, Company Owned Franchise Operated, franchise Owned Company Operated and franchise Owned franchise operated. Let`s understand their properties, pros and cons. Before investing money in a franchise, budding entrepreneurs look for the best business models that work best for them Each model has its own pros and cons. But FOCO models are a win-win situation for both the franchise and the brand. Because operating costs are borne by the brand, the franchise in the FOCO model can focus on promotion and distribution and leave the operation and logistics to the branded company. It also allows the brand to operate the outlets without the franchisee`s intrusion and generate revenue in a timely manner. Franchise Owned Company Operaated, abbreviated FOCO. In the FOCO, it is the franchisee who owns the property and takes over the other investments. While, franchising company manages business/outlet operations.
This model is also known as the Invested Company Operated franchise. Starting a business through the franchise model now a day has become really easy because consultants like PROPERTYYY.com has put all the brands together in one basket. Where you can choose a brand that matches your personality and meets your requirements. But thorough research is important before contacting an advisor. For the creation of a franchisee, a franchisor, in order to expand its activity in certain areas and create a franchise, would grant the franchisee a limited and non-exclusive license of the franchiser`s brand and logo. Determining the intellectual property associated with the franchisor and the extent to which the franchisor licensees its intellectual property over the franchisee is a very important aspect of franchise agreements. The franchisor should ensure the limited use of the intellectual property granted to the franchisee and ensure that it is not in any way misappropriated and harms the company and its value. On the other hand, a franchisee should receive reasonable insurance and guarantees from the franchisor for the ownership of the intellectual property thus granted, in order to ensure that it does not infringe the rights of third parties. While budding entrepreneurs who have a large amount of money in their account to invest in opts for the FOFO model. While many brands do not prefer the FOFO extension model.