Branch and Franchise Difference

Branch and Franchise Difference

Branch and franchise are two different concepts of sub offices of the companies. Branch is run by the company itself, where franchise is run by a third party on behalf of the company. The difference between branch and franchise has been explained below;

1.    Operation Responsibility

In case of branch, company is responsible to run the operation within branch, where in case of franchise the day to day operation is run by the third party. This third party is known as franchisee.

2.    Product & Services

In case of branch, product and services both relates to company, where in case of franchise services are offered by third party, where product relates to the company. For example there may be a franchise for a shoe company, where company shoes are sold by the third party (Franchisee).

3.    Financing & Investment

In branch all investment is made by the company, where in case of franchise the investment is made by franchisee in franchise office. The Franchisee shares some percentage of profit for its investment.

4.    Profit

in case of branch profit are not shared with other parties and all profit goes to company, where in case of franchise some profit goes to the franchises against its investment.

5.    Quality of Services

In case of branch quality is directly maintained by the company, where in case of franchise quality is monitored by the company. Franchise may be cancelled for non compliance with Quality rules.

6.    Employees & Staffing

in case of branch employee are directly hired by the company and draw salary from the company payroll, where in case of franchise employee are hired by franchises and such employee has no relation with company.