Franchising is a type of contract in which one company (the franchisor) grants to another (the franchisee) the right to market certain products or services within a certain geographical area and under certain conditions. This is in exchange for financial compensation.
When a franchise contract is made, there are two parties that can be distinguished between the franchisor (the company that grants the rights to market its product) and the franchisee (the investor that acquires the rights). Through this contract, both obligations and rights are established for both parties.
It also has the power to control the handling of trademarks and other distinctive signs, to demand compliance with the instructions for the operation of the business, and to have access to the documentation necessary to keep adequate control over the franchisee's sales and stock. In return, it must provide the know-how, patents, supplies and all the elements necessary for the operation of the business.
The franchisee has the right to receive the preparation and technical training required to manage the operations of the company. Its obligations are to make the payment of the right and royalties, to maintain constant coordination with the franchisor and to respect the established policies regarding quality, price, customer service, among others.
According to the Director of Front Consulting Group El Salvador, José Manuel Soto, this format has the advantage that the owner of the brand can continue growing with units or his own network and can transfer his business to an investor or a third party and thus become an entrepreneur.
Front Consulting is a company dedicated to convert ventures or business models into franchises in El Salvador, the institution can help other businesses to expand nationally and internationally.
This company motivated the Uruguayan brand, Urban House, to place its first clothing franchise in El Salvador. And it has also helped 25 salvadoran companies that have developed their franchise concept, among them some are large and recognized brands in the country.
In addition, the institution made an alliance with the Corporación de Exportadores de El Salvador (COEXPORT), allowed them to develop programs to reach companies more easily, so they can have advice and support for business growth.
Front Consulting, which belongs to the Latin American network of franchised investors, is always looking to make alliances with companies from other countries to place them in El Salvador.