There are several lexical meanings of the word “franchise”. The term French in origin can be seen in completely different areas. This concept occurs when it comes to economics, insurance, and even cinema. We will analyze each case in order.
Franchise in Economics
When a company succeeds in the market, it begins to sell the right to use its name, that is, the brand, to others. At the same time, people who want to acquire such a right must maintain the level of quality, service, appearance of outlets, etc. The owners of the company, franchisors, and a person who wants to trade under the brand of this company enter into an agreement. Such an agreement is called a franchise agreement or franchise.
In simple words, the meaning of the word “franchise” is a license, permission to use the brand. A person who acquires a franchise, a franchisee, gets a ready-made business model. People in his country or even around the world trust this company, which means that the franchise buyer already has customers. Franchisors also help in organizing business, conduct trainings, and can provide equipment. In return, the franchise buyer pays a large sum of money to the business owners immediately and for each year.
One of the most famous franchises are fast food restaurants: Macdonald's, KFC, Burger King. In each country, something different can be added to the menu and the appearance of the institutions, but in general the concept remains unchanged. For example, in Germany, they sell beer at McDonald's, because otherwise restaurant traffic will drop sharply.
Insurance Franchise
In this type of business, the meaning of the word “franchise” is used in many cases. In a generalized version, these are additional conditions of the insurance contract. That is, the insurance company separately prescribes in the contract situations in which it pays you extra or you give it to her. There are several classifications and names of deductibles in insurance. For example, consider conditional and unconditional.
A contingent deductible is the amount of damage above which the insurance company reimburses you. For example, when you fly to rest, you need to take out insurance. If you get sick and the amount of treatment was 50 euros, and the deductible was issued for 60 euros, the insurance company will not pay you anything. If you spent 65 euros on treatment, the insurance would return you 65 euros.
The unconditional deductible reflects the amount that you incur for any amount of damage. In this case, the meaning of the word “franchise” can also be demonstrated by the example of relaxation. Suppose you agreed to a franchise of 20 euros. Something happened while traveling with you, you spent 15 euros to eliminate the consequences. The insurance company does not pay you anything. And if you spent 25 euros, then she will pay you the difference from this amount:
- 25 - 20 = 5 euros;
- 5 euros - the compensation that you will receive from the insurance company.
Franchise insurance is obviously cheaper. When buying such a policy, you must bear the additional cost. In case of risk aversion, you will have to pay more.
Franchise in the cinema
In this case, the meaning of the word “franchise” is rather colloquial. The official name for this phenomenon is media franchise. This concept means a set of characters and sets that go from film to film. This phenomenon also applies to computer games and literature.
The most popular franchises in the media industry include Harry Potter, The Lord of the Rings, Star Wars.
You can find this concept in reviews of films. For example, here is a quote from the Terminator movie review:
Neither new-fangled graphics, nor the apocalyptic ending of the film, with which the authors wanted to close the franchise with the idea "can not change the future," saved. The 4th and 5th parts win compared to the third, due in part to the game of non-main characters.
Conclusion
The article discusses the most popular meanings of the word “franchise”. As you can see, this is a rather ambiguous concept. Nevertheless, the use of the term is different, so it will not be difficult to determine what exactly is meant.