Understanding the differences between a franchise and a business package
Many people get confused between business packages and a franchise. However, although the two are alike in some ways, they also have many differences.
What is a business package?
If you are budding entrepreneur and have been given material in the form of a package which consists of information, materials, tools needed and documents then you are likely to have been given a business package. Many companies may also give you some training to help you get started.
What is a franchise?
A franchise covers a diverse range of arrangements between two partners. The two partners are likely to be a service, product or a celebrity who allows another smaller entity to use or manufacture their products. In case of a celebrity, just allowing the use of a brand name could be called a franchise. Here the franchisor is the party who is lending its products or services. The party that needs to sell the product or service is known as the franchisee. In this case, the franchisor receives a sum of money for providing knowledge or giving the franchisee some of its stock. A franchisor may also provide the franchisee with a range of other things, such as promotional material or their customer database.
Although many people get confused between a franchise and a business package, once you understand the fundamentals it is very simple to distinguish them.