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Franchising is the practice of using another firm's successful business model. The word 'franchise' is of anglo-French derivation - from franc- meaning free, and is used both as a noun and as a (transitive) verb.[1] For the franchisor, the franchise is an alternative to building 'chain stores' to distribute goods and avoid investment and liability over a chain. The franchisor's success is the success of the franchisees. The franchisee is said to have a greater incentive than a direct employee because he or she has a direct stake in the business.

European Code of Ethics for Franchising:
Is a system of marketing goods and/or services and/or technology, which is based upon a close and ongoing collaboration between legally and financially separate and independent undertakings, the franchisor and its individual franchisee, whereby the franchisor grants its individual franchisee the right, and imposes the obligation, to conduct a business in accordance with the franchisors concept. The right entitles and compels the individual franchisee, in exchange for a direct and indirect consideration, to use the franchisors trade name, and/or trade mark and/or service mark, know how, business and technical methods, procedural system, and other industrial and/or intellectual property rights, supported by continuing provision of commercial and technical assistance, within the framework and term of a written franchise agreement, concluded between parties of this purpose

Harry Campbell Black (Blacks Law Dictionary):
1.A special privilege to do certain things conferred by government or individual or corporation, and which does not belong to citizens generally of common right, e.g. right granted to offer cable television service 2.A privilege granted or sold, such as to use a name or to sell product or services. The right given by a manufacturer or supplier to retailer to use his products and name on terms and conditions mutually agreed upon 3.A license from owner of a trademark or trade name permitting another to sell a product or service under the name or mark

International Franchise Association (IFA)

.continuing relationship in which a franchisor provides a licensed privilege to do business, plus assistance in organizing, training, merchandising and management..

Lloyd T. Tanbutton: Franchise adalah:
A long term, continuing business relationship wherein for a consideration, the franchisor grants to the franchisee a licensed right, subject to agreed upon requirements and restrictions, to conduct business utilizing the trade and/or service marks of the franchisor and also provides to the Franchisee advice, and assistance in organizing, merchandising, and managing the business conducted pursuant to the licensee.

Except in the US, and now in China (2007) where there are explicit Federal (and in the US, State) laws covering franchise, most of the world recognizes 'franchise' but rarely makes legal provisions for it. Only Australia, various provinces within Canada, France and Brazil have significant Disclosure laws but Brazil regulates franchises more closely. Where there is no specific law, franchise is considered a distribution system, whose laws apply, with the trademark (of the franchise system) covered by specific covenants.

The franchisee must carefully negotiate the license. They, along with the franchisor must develop a marketing plan or business plan. The fees must be fully disclosed and there should not be any hidden fees. The start-up and costs and working capital must be known before taking the license. The franchisee must be seen as an independent merchant. He must be protected by the franchisor from any trademark infringement by third-parties. A franchise attorney is required to assist the franchisee during negotiations

Also, franchise agreements carry no guarantees or warranties and the franchisee has little or no recourse to legal intervention in the event of a dispute. Franchise contracts tend to be unilateral contracts in favor of the franchisor; they are generally protected from lawsuits from their franchisee because of the non-negotiable contracts that require franchisees to acknowledge, in effect, that they are buying the franchise knowing that there is risk, and that they have not been promised success or profits by the franchisor. Contracts are renewable at their sole option. Most franchisors make franchisees sign agreements waiving their rights under federal and state law, and in some cases allowing the franchisor to choose where and under what law any dispute would be litigated.

Franchise Competitive Practice Act (USA)
The term franchise shall mean a contract or agreement, either expressed or implied, whether oral or written, between two or more persons: 1. Wherein a commercial relationship of define duration or continuing indefinite duration is involved 2. Wherein one person, hereafter called the franchisee, is granted the right to offer, sell, and distribute goods or services organized and directed by the other person, hereafter called the franchisor 3.Wherein the franchisee as an independent business constitutes a component of a franchisors distribution system 4. Wherein the operation of the franchisees business franchise is subtantially associated with advertising or other commercial symbol designating the franchisor; and 5. Wherein the operation of the franchisees business is substantially reliant on franchisors for the continued supply of food or services.

Sejarah Franchise Internasional

1. Istilah Franchise berasal dari bhs. Perancis kuno yang berarti bebas. 2. Pada abad pertengahan istilah Franchise bearti hak utama atau kebebasan (hak khusus dari Lord kepada rakyat utk. Beraktivitas di atas tanahnya (misalnya berburu, dll.) 3. Hak monopoli bisnis yang diberikan raja kepada seseorang untuk menjalan aktivitas bisnisnya (membangun jalan, saluran air, dsb.) 4. Tahun 1880, franchise berkembang di Jerman: hak khusus untuk menjual minuman. 5. 1951 di AS: perusahaan mesin jahit Singer memberikan license untuk menjual mesin-2 Singer dg perjanjian tertulis (pelopor franchise modern) 6. Model Franchise masih sederhana: pemberian hak untuk pendistribusian produk dan menjual produk-produk hasil manufaktur. 7. Era baby boomer (1960-1970), setelah PDII: terjadi peningkatan kebutuhan yang luar biasa terhadap segala jenis produk barang dan jasa, spt. Hotel dan fast food. Konsep franchise berkembang subur di AS 8. Dibentuk The International Franchise Association (IFA), berkedudukan di Washington DC bernaggotakan negara-negara yg bertujuan utk mengangkat pamor franchise. 9. IFA kemudian bekerjasama dengan Federal Trade Commision AS untuk memperbaiki hubungan antara F-sor dan F-see 10.1978, FTC mengeluarkan dokumen The Uniform Offering Cirkular (UFOC), dokumen yang harus dibuat franchisor berisi informasi yang terinci dan jelas mengenai hal-hal penting yang harus diketahui franchisee.

Sejarah Franchise di Indonesia

1. Franchise international Dimulai awal tahun 1990an (1996: 119 FI) 2. Franchise Lokal: Pelopor Pertamina dan Jamu Nyonya Meener (1996: 32 FL)

Elemen-Elemen Pokok Franchise: 1. Franchisor: Pemilik/Produsen barang atau Jasa/merek tertentu 2. Franchisee: yang menerima hak eksklusif dari franchisor 3. Adanya penyerahan hak eksklusif 4. Adanya penetapan wilayah tertentu 5. Adanya imbal-prestasi (initial fee dan royalty) 6. Adanya standard mutu dan supervisi 7. Adanya pelatihan awal dan berkelanjutan

Jenis dan Pola FRANCHISE (WARALABA) Menurut IFA, ada 4 jenis Franchise mendasar di AS:
1. Product Franchise:
Manufacturers use the product franchise to govern how a retailer distributes their product. The manufacturer grants the store owner by the manufacturer and allows the owner to use the name and trademark owned by the manufacturer. The store owner must pay a fee or purchase a minimum inventory of stock in return for these rights. Some tire stores are good examples of this type of franchise 2. Manufacturing Franchises This type of franchises provide an organization with the right to manufacture a product and sell it to a public, using the franchisors name and trademark. This type of franchise is found most often in the food and beverage industri Most bottlers of sofr drink receive a franchise from a company and most use its ingredients to produce, bottle, and distribute the soft drinks.


3. Business Opportunity Ventures: These ventures typically require that a business owner purchase and distribute the products for one specific company. The company must provide customers or accounts to the business owners , and, in return, the business owner pays a fee or other consideration as compensation. For ex. Vending machine.
4. Business Format Franchising

This is the most popular form of franchising. In this approach, a company provides a business owner with a proven method for operating a business using the name and trademark of the company. The company will usually provide significant amount of assistance to the business owner in starting and managing the company. The business owner pays a fee or royalty in return. Typically, a company also requires the owner to purchase supplies from the company.

Franchised businesses operated 767,483 establishments in the United States in 2008: 1. Subway (Sandwiches and Salads) | Startup costs $84,300 $258,300 (22000 partners worldwide in 2004). 2. McDonald's | Startup costs in 2010, $995,900 $1,842,700 (37,300 partners in 2010) 3. 7-Eleven Inc. (Convenience Stores) |Startup Costs $40,500- 775,300 in 2010,(28,200 partners in 2004) 4. Hampton Inns & Suites (Midprice Hotels) |Startup costs $3,716,000 $15,148,800 in 2010 5. Great Clips (Hair Salons) | Startup Costs $109,000 - $203,000 in 2010 6. H&R Block (Tax Preparation and e-Filing)| Startup Costs $26,427 - $84,094 (11,200 partners in 2004) 7. Dunkin Donuts | Startup Costs $537,750 - $1,765,300 in 2010 8. Jani-King (Commercial Cleaning) | Startup Costs $11,400 - $35,050, (11,000 partners worldwide in 2004) 9. Servpro (Insurance and Disaster Restoration and Cleaning) | Startup Costs $102,250 - $161,150 in 2010 10. MiniMarkets (Convenience Store and Gas Station) | Startup Costs $1,835,823 - $7,615,065 in 2010

According to the International Franchise Association approximately 4% of all businesses in the United States are franchisee-worked. The midi-franchises like restaurants, gasoline stations, trucking stations involve substantial investment and require all the attention of a business. There are also the large franchises - hotels, spas, hospitals

Businesses for which franchising work best have one or several of the following characteristics: A good track record of profitability. Easily duplicated. Detailed systems, processes and procedures. Around a unique or unusual concept. Broad geographic appeal. Relatively easy to operate. Relatively inexpensive to operate. Two important payments are made to a franchisor: (a) a royalty for the trade-mark and (b) reimbursement for the training and advisory services given to the franchisee. These two fees may be combined in a single 'management' fee. A fee for "Disclosure" is separate and is always a "front-end fee".

Menurut Pedoman Pelaksanaan Keterkaitan Kemitraan di Bidang Industri Kecil, ada 3 bentuk Franchise: 1. Product Franchise Franchisor memproduksi suatu produk/jasa. Franchisee membentuk outlet utk memasarkan produk tersebut. Contoh: keagenan sepatu. 2. Business Opportunity Ventures Franchisee mendistribusikan produk barang/jasa yang dihasilkan franchisor, dimana franchisee mengikuti sistem yang ditetapkan franchisor. Contoh: dealer kendaraan bermotor 3. Business Format Franchising: Franchisee diberi lisensi untuk memasarkan product milik franchisor sesuai dengan sistem yang ditetapkan dan menggunakan merek dagang/nama perusahaan franchisor. Contoh: hotel, real estate, fast food

Seorang atau Badan Hukum yang usahanya menjadi perantara yang diberi kuasa untuk melakukan perbuatan tertentu. Misalnya membuat perjanjian dengan pihak ketiga untuk dan atas nama principal, atas perbuatannya itu mendapatkan imbalan. Agen bukan karyawan principal, ia hanya kuasa principal. Fungsi agen adalah sebagai perantara yang menjual barang/jasa untuk dan atas nama principal. Agen mendapatkan komisi berdasarkan hasil penjualan barang/jasa principal. Barang yang dipesan akan dikirim langsung oleh principal kepada pembeli dan pembayaran langsung kepada principal. Jadi hubungan hukum yang terjadi adalah antara principal dan pihak ketiga. (Wewenang yang dimiliki agen adalah bertindak untuk dan atas nama principal. Principal akan bertanggung jawab atas tindakan-tindakan yang dilakukan oleh seorang agen, sepanjang agen bertindak dalam batas-batas wewenang yang diberikan kepadanya oleh principal.

Seorang atau Badan Hukum yang ditunjuk oleh principal untuk membeli barang-barangnya dan memasarkan atau menjualnya dalam wilayah tertentu, tetapi ia bertindak untuk dan atas namanya sendiri dan segala akibat perbuatannya ditanggung sendiri. Hubungan usaha sebagaimana diatur pada pasal 1457 KUH Perdata mengenai jual beli Principal akan bertanggung jawab atas tindakan-tindakan yang dilakukan oleh seorang agen, sepanjang agen bertindak dalam batas-batas wewenang yang diberikan kepadanya oleh principal.

Kerjasama antara Franchisor dan Franchisee. Franchisor memberikan haknya untuk membuka unit usaha yang serupa (franchisor) kepada pihak lain yang menerima hak (franchisee)

Kerjasama bersifar tertutup dan terus menerus antara para pelaku yang terpisah secara hukum dan keuangan.
Franchisor memberikan hak untuk menggunakan merek dagang, dan/atau merek jasa, know how, bisnis, metode tehnis, sistem dan prosedur, atau HMI dan industrial yang didukung oleh bantuan tehnis secara terus menerus kepada franchisee untuk melaksanakan bisnisnya sesuai dengan konsep dari franchisor, untuk semua itu francisor mendapatkan initial fee, royalti, dan lainlain

Resiko yang terjadi menjadi tanggung jawab sepenuhnya pihak Franchisee, karena pada dasarnya franchisee merupakan pihak yang mandiri, keculai diperjanjikan lain.