According to the definition given by IFA, franchise chain is a continuous contractual relationship between chain headquarters and franchise stores. According to the contract, the head office must provide unique commercial privileges, plus personnel training, organizational structure, management and commodity supply and marketing assistance; And franchisees also need to pay relative compensation. "

Because this definition is too simple and general, a former president of IFA added: Franchise chain is an economic and simple way of operation. Through a commodity service and marketing method, we can achieve success with minimum investment risk and maximum opportunity, but we must give up some freedom and choices, such as business decision.

According to the above definition, we can grasp the essence of franchise chain from the following points: the head office and franchise stores are independent institutions based on contractual relationship; Joining the store owner is neither an agent nor an employee. The head office provides franchisees with trademarks, goods (or services), which symbolizes the company's overall design and management technology. Franchise stores are engaged in selling the same goods or services under the same image and goodwill as the head office. Compared with the rights granted by the head office, franchisees must invest relative operating funds, including franchise funds, royalties, contract funds and other start-up funds.

In addition to relative funds, franchisees also have relative obligations, that is, to abide by various restrictions and regulations of the head office. During the contract period, the head office must continue to operate and assist the franchise stores.

Franchise, direct chain and voluntary franchise

Franchise FC (Franchise Chain) is a contractual relationship in which the headquarters with technical and management experience guides and teaches the technical experience of franchise stores in various operations, and collects a certain percentage of commission and guidance fee. Franchising headquarters must have a complete and effective set of operational technical advantages, so as to transfer guidance, let franchisees operate quickly, and gain benefits from it, and the franchise network can grow day by day. Therefore, how to inherit management technology is the key to franchising.

Direct chain RC(Regular Chain) refers to a chain store directly operated by the head office, that is, the head office directly manages the retail outlets, which has no franchise stores. The headquarters adopts a deep management mode and directly places orders for all retail outlets. There is no doubt that retail stores must fully accept the command of the headquarters. The main task of direct chain is "channel operation", that is, to obtain profits from consumers through the expansion of business channels. Therefore, the direct chain is actually a "management industry".

Voluntary joining VC (voluntary chain) is a shop that voluntarily joins the chain system. Because this kind of store already exists, it is not a franchise store, but was originally founded by a chain headquarters, so it should be different from a franchise store in name. In the voluntary franchise system, the ownership of goods belongs to franchisees, while the operation technology and store brand belong to the headquarters. Therefore, although the operation of the voluntary franchise system is based on the unity of franchisees' recognition of "fate * * *", we should also take into account the premise of "life * * * *" cooperation and development, on the one hand, we should maintain franchisees' independent operation. Therefore, voluntary franchising can actually be called "the industry of ideas". It means to pay attention to the communication between the two and realize the primary goal of cooperation.