FRANCHISE AGREEMENTS AS A FACTOR INFLUENCING THE COMPETITIVENESS OF THE PARTIES

Abstract

Franchising is one of the forms of operation for the market chain operators. This is an effective way of building cooperation between the independent market players who, as a rule, represent some large and small enterprises. This is a popular form of building a business relation which is based upon the common use of a brand for the mutual profit of both companies. The brand is one of the most important intangible assets of a company and is an instrument used in the modern competition where the other-than-the-price factors make an impact. A franchise agreement guarantees some competitive advantages for both the buyer and the seller of the brand name use rights. This form of operation has not been used for long by the Russian market players, but its popularity is growing fast in spite of some existing barriers. As the franchising potential secures the national economy growth and makes the small businesses play a more important role in the market economy, this form of cooperation becomes a subject matter of the scientific research and a factor in the state economic policy development.