What is the deductible?

One can often hear the word franchise, especially if we are talking about any brands, or large companies. However, to properly understand what a deductible is, it is not so simple. Is not only to address the direct meaning of the word, but also to consider some examples.

what is the deductible

Like many words, has several meanings. For starters, it makes sense to focus on the most common.

What is the deductible?

In most cases, if the conversation occurs this way, we are talking about any commodity-money relations. In this situation, the word would have the following explanation.

Franchise is a kind of contract that someone enters into a large company that formed its own unique and recognizable brand. Such a contract allows the other person to speak.

The most common example is the appearance of the fast food chain McDonald’s in Russia. Before to see these institutions was only possible abroad, but now they are in almost any major city. Such was done through the franchise. Thus, Russian entrepreneurs have got for your business meaningful name and, accordingly a wide clientele, and the company owner was able to further expand its network.

franchise

The pros and cons

On the one hand, in such a situation everyone wins. First you do not need to spend time on the creation and development of its own brand, its advertising, and others don’t need to do practically nothing, and they will make a profit.

On the other hand, this profit they will need to continue to always, as long as the user franchise decides to close his establishment. So you’ll have to pay, and a lot. The amount can vary, depending on the contract, but usually it varies from 5 to 10 percent of net profit. It is a classic number – 8%. Add to this the fact that the conclusion of an agreement, you need to make a contribution. It may be very different, and often more than a hundred dollars.

Other values

In order to know exactly what a deductible is, it is necessary to consider the other meaning of the word.

If it originated in the insurance industry, it will mean the liberation of an insurance agent from damages. There are several types of such franchises. Among them:

  • conditional,
  • unconditional,
  • temporary,
  • total.

In the case of conditional deductible, the amount not paid if the damage did not exceed the established amount in the contract. Payments are made if it is more than the specified in the documents.

There is also the word the media franchise. Objectively it should only be used in this form, but in spoken language it is often replaced by a simple «franchise». This concept refers to a variety of works, like videogames, movies or books. As a rule, the media franchise is a transition from one form to another. The most common examples is the adaptation of the books, creating a series of comics, the transition film in the series. It is now becoming very popular to make films known and recognized video games like Assassin’s Creed, Warcraft, and many others.

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A media franchise are a variety of continuing and branches. For example, if the film came out second (third, fourth) part, it will also be called media franchise. The same applies to the backgrounds, a variety of spin-offem and alternative stories.

The word franchise is used in sports environment. It means that a professional team has another name. For example, franchise Minnesota Timberwolves will be in the name «Timberwolves».

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