Franchising, also known as commercial affiliation, is a form of collaboration between entrepreneurs for the distribution of services and/or goods, suitable for those who want to start a new business using formats that have already been tested and established on the market.
Franchising is in fact a collaboration agreement that finds on one side a company with a consolidated commercial formula (affiliator, or franchisor) and on the other a company or an individual entrepreneur (affiliate, or franchisee) who adheres to this formula, while remaining an independent entrepreneur.
The parent company, which can be a manufacturer or distributor of products or services of a specific brand or brand, grants the affiliate, usually an independent retailer, the right to market its products and/or services using the franchisor’s brand, as well as offering technical assistance and consultancy and granting know-how on proven working methods. In exchange, the affiliate undertakes to comply with the standards and management/production models established by the franchisor, actively contributing to increasing brand awareness and the success of the entire network.
Generally, in exchange for the services offered, both initial and periodic, the franchisor may request one-off payments (such as the entry fee) or periodic payments (such as royalties on turnover or contributions for marketing campaigns).
For both parties involved, there is always a legal obligation to comply with the rules and contractual conditions that govern the relationship.
In the Italian economic market, franchising is regulated by Law 6 May 2004, no. 129.
The regulations, laws and rules in force regarding commercial affiliation do not present stringent limitations or standardized conditions that are always valid. Therefore, the franchising contract can present very different conditions, obligations and advantages depending on the objectives and standards of the parent company (franchisor).
