What is the definition of Franchisor in the hotel industry?
A person or corporation that grants a franchise to an entity, group, or company through an arrangement.
Their position consists of delivering everything needed for the franchisee to manage their business accordingly to the franchisee agreement. A franchisor usually provides a brand, marketing operating procedures and more letting the franchisee several benefits. Being a Hotel Franchise Company allows a business to grow at a higher pace than natural growth would permit. As the franchisee frequently incurs most of the costs and the franchisor mostly earns the royalty fee for his services, this is also a low risk way of growth for companies.
Benefits of a Franchisor
Franchisors gain from franchise agreements because they allow companies to grow much more quickly than they could otherwise. A lack of resources and employees can cause a company to expand slowly. Through franchising, a company capitalizes very little capital or labour because the franchisee supplies both. The parent company experiences rapid expansion with little financial risk.
A company can also ensure it has knowledgeable and highly driven owners and managers at each outlet through franchising. Since the owners are largely accountable for the success of their outlets, they will put in a strong and relentless effort to make sure their enterprises run smoothly and prosper. In addition, companies can provide franchising rights to only eligible people.