Bifranchise Concept

What is BiFranchise? [by-fran-chahyz]

BiFranchise is a system of business cooperation where one party (BiFranchisor) grants another party (BiFranchisee) the right to use its business name, business methodology and the network exclusively in a nominated territory for a specified period of time. Unlike a regular franchise business a bifranchise is a two-way franchise where the bifranchisee purchases from as well as supplies products to the fellow bifranchisees within the network, in this instance the bifranchisee acts as a bifranchisor.

While franchising works mainly as a business-to-consumer (B2C) business on a local/national level, bifranchise works mainly as a business-to-business (B2B) on an international level. Bifranchise operates under the same laws, rules and regulations as the international franchise system.

The major difference between franchising and bifranchising is that in franchising, the franchisor supplies majority (if not all) of the products/services to be sold by the franchisee. The franchisees are not permitted to purchase products or services from any other source. The bifranchisees are not obligated to buy/sell all the products offered by the bifranchisor, i.e. bifranchisees can choose which products to purchase from the bifranchise network. Just as the franchisor is in control of the franchise, the bifranchisor is in control of the bifranchise.

In bifranchising, the bifranchisor acts as a centralized distributor and coordinator who supervises and manages the flow of products/money from the bifranchisees to the bifranchise network. The bifranchisor charges the bifranchisees a percentage of each transaction and royalty fees. Various tangible and intangible assets such as websites, transaction clearing services, currency exchange, marketing, sales training and international advertising are offered by the bifranchisor to support the network.

The name BiFranchise was first used by GIA Trading Group as they were establishing their international network of trading companies. When the management of GIA Group wanted to use the franchise structure to establish and link their trading companies worldwide, the proposal was rejected by the members of the group and the GIA Group marketing department because the operational method and philosophy of the business was completely deferent from that of the normal franchise. Since the legal structure of the business is that of the franchise concept, but the franchisor does not exclusively supply its products to the franchisees and the franchisees can act as franchisors and supply products to the franchisor and to other franchisees we have a two-way situation, so it was agreed the word bifranchise to be used for this business model.

The bifranchise model is used in the international trade. You are welcome to comment on the name (bifranchise) and the model.
Interested in hearing new ideas and alternative markets where this business model can work well.