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Each franchise model is of different types with its own set of benefits. There are four types of franchise model. They are-
COCO- Company Owned Company Operated
COFO- Company Owned Franchise Operated
FOCO- Franchise Owned Company Operated
FOFO- Franchise Owned Franchise Operated
Among these, FOFO model is the most successful in the Food & Beverage franchise industry.
Here we will discuss the features of FOFO model and its advantage in the business.
In FOFO model, the franchise manages the entire operation abiding the laws in the franchise agreement. The franchise provides for the capital and all other operational expenses. In this model, the franchisor has a very minimal expense as most of the cost are covered by the franchisees.
FOFO model is the most preferred model as the establishments find it easy to manage. As the franchise makes the entire investment, it gets the maximum return of the revenue and the franchisor gets a small amount of royalty.
As per reports, almost 90 % of the franchise industry falls into the FOFO category. However, the franchise assures the percentage share of revenue and minimum guarantee to the company.