Investors who open a franchise business in Hong Kong have access to a successful and proved business model, a convenient business option for many entrepreneurs.
Franchising, as a business concept, can be mutually advantageous both for the business that wants to expand and for the entrepreneur who wishes to purchase a business model.
Our Hong Kong company formation agents describe the franchising process and the implications for both parties.
The franchisor and the franchisee in Hong Kong
Franchising is a simple business model that relies on a party who sells an already existing and tested business model, the franchisor, to a party who wishes to acquire a business and benefit from certain market advantages, the franchisee.
Franchising is a manner in which an already successful business can expand rapidly in many other countries. This is why franchisors choose to sell their business model to another individual or company that will internalize it and become an affiliate.
Hong Kong’s success as a business center in Asia, combined with the fact that it has a free and service-oriented economy, make it an attractive location to base a franchise. Investors who are interested in company formation in Hong Kong and choose to open a franchise will typically look towards business sectors like fast-food or catering, retail or other services.
The franchise agreement
The relationship between the franchisor and the franchisee is defined in the franchise agreement. Thus, the franchisor allows the franchisee to use its name, brand and any trademarks and may provide needed support. The franchisee has access to an already existing and successful business model and it is the one to manage the franchise in Hong Kong. Investors who open a company in Hong Kong after they bought into a franchise model have this particular advantage of operating a business that has already been tested in other markets.
You can contact or agents who specialize in company formation in Hong Kong to find out more details about franchising and other business options.