Antitrust Law And Economics Of Product Distribution

The business that I want to open would be a franchise of a McDonald’s restaurant. McDonald’s is a fast-food restaurant that serves a variety of products, but is mostly known for its

19. Franchise operations, such as Krispy Kreme, Papa John’s Pizza, and H&R Block, are examples of ___________.

ASK 1 a.) Primark Menswear has sold 120 franchises. Explain what a franchise is. 1. Franchise Franchise is a type of business that involves the relationship between a franchisor and franchisee. The franchisor is the owner of the business, while the franchisee is the one who buys the rights of the company from the franchisor to be able to sell the same products using the same company name and logo with the same components.

Franchising is a business model that allows companies to rapidly expand their market share. According to Franchise.com (2015), there are three types of franchises: distributorships, trademark licensing, and business format franchises. When two organizations enter into a distributorship, the originating company provides the rights another company to sell their products. An example of a distributorship is when an auto manufacturing company grants rights to a dealership to sell their vehicles (Franchise.com, 2015). Trademark licensing is when one company allows another company to use their trademark (Franchise.com, 2015). The business format franchise authorizes franchisees to sell the parent company’s products and/or services as well as utilize their business model. This type of franchising is the most common and is the type needed to obtain to open a new Cold Stone Creamery.

The franchise marketing is introduced to the business market from quite a long time. It is to be noted that while expanding the business entity over the global competitive market, the local companies sell

McDonald’s has extremely strict rules when it comes to awarding franchises. First, it is very costly to open a new location or purchase an existing location, with the median startup cost being $300,000 (Kalnins & Lafontaine, 2004, p. 750). As well, the company does an extensive background check on a variety of issues including credit history, business management experience, and the acceptance of the contractual agreement that the company provides. Because of these strict rules and the large amount of capital needed to purchase a location, “rates for franchise applicants are 1% for McDonald's” (Norton, 1988, p. 204). This is an extremely low acceptance rate and is even lower than McDonald’s chief competitor, Burger King, who accepts 1.5% percent of applicants (Norton, 1988, p. 199). These low numbers are understandable in the context of the business and risk that is involved. Though the franchise purchaser must pay a large amount of money to gain the rights to the restaurant, they truly have nothing to lose besides money because they are simply running another company’s business model as well as using their trademarks and logos. McDonald’s on the other hand, has a great amount at stake because they place the well being of an entire restaurant into the caretaking of an individual who simply purchased the rights for the store. If the store does poorly or if there are issues with customer service, it reflects

Introduction Opening up a business such as a franchise can carry many risks, both financially and personally but can also be very rewarding and challenging. Some people make a decent living, some end up rich, then again, plenty of people fail. (MSNMoney, 2014) There are many advantages of owning a franchise. Some advantages are that you have association with a well-established brand, reputation and product or service, access to established standard procedures, operating manuals and stock control systems.

Franchising has attracted some 34,000 people in the UK to invest in their future in self employment. Here are 15 reasons why franchises offer an attractive business opportunity.

Manufacturing and Wholesale - In this type of franchise a franchiser grants a manufacturer the right to produce and sell goods using its name. This type of franchise is common among food and beverages companies. For example, soft drink bottles obtain franchise rights from soft drink companies to produce, bottle and distribute soft drinks.

• The most critical opportunity is the location(s) of expansion. Focusing on long-run profit potential would be expanding in a familiar ‘home-base’ region. From the alternatives, a location(s) that could achieve all key success factors coupled with a strong Franchisee base (that meets required criteria) would be the first step to the desired goal of the revenue growth process. From this foundation, a critical path to overcome market entry obstacles would need to be addressed.

This capital acquisition explanation argued that organizations were forced to resort to franchising because it allowed them to expand quickly without having to source scarce external financial resources or to relinquish control as in a joint venture or stock market operation (Caves & Murphy, 1976). Thus, over time, it was expected that franchisers would repurchase or take over the (best) franchised units in the system and eventually become fully company owned (Oxenfeldt & Kelly, 1969). However, research into this phenomenon has produced mixed results in the United States (for example, Hunt, 1973; Brickley & Dark, 1987; Lafontaine, 1992). Moreover, it has been found that where ownership redirection occurs it is ‘‘more strategy driven than opportunistic’’ (Dant, Kauffman, & Robicheaux, 1998, p. i). Indeed, Blair and Lafontaine (2005) comment that ‘‘most franchise chains are hybrids: partially vertically integrated and partially franchised’’ (p. 107). In contrast, while some large fast food chains (such as McDonald’s) strategically ensure a mix of franchised and company-owned units, most franchise systems in Australia are almost fully franchised (Frazer, Weaven, & Wright, 2008). Hence, different franchising models are employed around the world, and there is no ‘‘one-size-fits-all’’ approach. An alternative explanation of franchising, first put forward by Rubin (1978), focuses

A franchise contract is a form of organization involving two independent firms with the aim of selling goods and services in a specific area ( “How to influence franchise contracts: the Spanish case”Alicia Garci’a- Herrera, Rafael Llorca-Vivero, 2009). Another resource- Business dictionary describes franchise agreement as a contract in which well-established business provide its brand, operational model and required support to another party in order to set up and run similar business. This costs a fee and/or a part of generated income. This distribution technique increases competition between companies producing similar products or services by high efficiency and transaction costs reduction. By this distribution technique the franchisor gains access to more new markets, can raise profits, decrease costs and share risks while still controlling the new franchisee. This collaboration is very important for small and medium businesses. In 2009, a third of retailing networks in US were by franchise contract, in EU impact is smaller but is also growing (Garci’a- Herrera, Llorca-Vivero, 2009).

The US Federal Trade Commission defines a franchise as: a business arrangement which allows for the reputation, (goodwill) innovation, technical know-how and expertise of the innovator (franchisor) to be combined with the energy, industry and investment of

It is the authorization or a license given to an individual or a group by a government or company allowing them to carry out commercial activities. Examples of franchise would be providing a broadcasting service or acting as an agent for a company’s product. Franchising is one of the three strategies that businesses use to gain market share. Companies that want to give a good image of their products to their customers, use franchising. It is also a method used to satisfy customer needs. An advantage of franchising would be, having a certain level of independence.

After ten years in the corporate world, I am ready to start my own business. Although I do not have experience in starting a business, I have knowledge in sales, marketing, management, accounting and finance. Owning a franchise business will allow me to gain knowledge by experience and from other franchisors. Attached is four specific franchises I have carefully chose from the nutrition, children 's fitness, health and beauty categories that I could successfully operate without having experience in owning a business. There are many fields available in the franchises business. I have chosen Massage Envy, Jamba Juice, GNC, and Gymboree Play and Music as the four best franchise options that I could operate successfully. In addition, this report demonstrates the four franchises and how they are examined according to the nature of the business, the financial requirements, the level of support the company provides, and the locations in which the franchises are available in each of the four franchises. Furthermore, secondary research, and a compare and contrast to each of the franchise 's competitors are based on the four criteria is included into the report.