Case Study : Franchising And Marketing Management Essay

A franchise is a legal agreement between franchisers and franchisees that consents use of the franchise’s trademark and trade name or marketing plan

1. Franchisees gain numerous advantage when they purchase a franchise. First, while a franchisee may be opening a new store, it is part of an already established business and system. This means a franchisee has access to turnkey operations, allowing an increased speed to establishing and growing the business. Franchisees also get support for management and training activities, as well as financial assistance. Going hand in hand with this, a franchise already has an established brand name, quality of goods and service which have been standardized across the franchisor’s larger company, and national advertising programs from franchisors. Franchises also have large-volume, centralized buying power. A franchise has proven products, and

While doing some research I found that a franchise agreement is a binding legal contract that is signed between a franchisor and franchisee. A franchisor is the company owning the rights to grant franchises to franchisees, while a franchisee is a person or entity who is given the right to conduct business by a franchisor or licensor. The most important definition however is that of a franchise which is an authorization granted by the government or company to an individual or group allowing them to carry out certain commercial activities.

The franchising is the chain of any particular business to run by diverse firms or affiliation successfully. The franchiser grants working their business attach to franchisee under franchiser 's term and condition. Assorted foundations business has different term and condition for its franchisee. Franchising business generally run in the regular lifestyle industry like McDonald 's, pizza cabin, domino 's, Subway at cetera. Some franchising chains similarly run in the organization gives efficient Western Union, Money gram, Post Shop et cetera. The greatest relationship of franchising is Subway restaurant

The franchiser can attain rapid growth for the chain by sign- ing up many franchisees in many different locations.

You pay a franchise fee and you get a format or system developed by the company (franchisor), the right to use the franchisor’s name for a limited time, and assistance. For example, the franchisor may provide you with help in finding a location for your outlet; initial training and an operating manual; and advice on management, marketing, or personnel. The franchisor may provide support through periodic newsletters, a toll-free telephone number, a website, or scheduled workshops or seminars.

The first choice of business is the franchise. In a franchise, legal binding agreement is entered into between two firms, the franchisor (the product or service owner) and the franchisee (the firm to market the product or service in a particular location). The franchisee pays a certain sum of money for the right to market this product” (Rubin, 1978, p.224). The franchising is more prevalent in the restaurant industry (Hoffman & Preble, 2003). The two distinct features of this business type include; first, in order to notable service components should

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.

Franchise means “privilege” or “freedom” and the word originates from an old French dialect. The history of franchising can be traced back to the Middle Ages (476 A.D. – 1453 A.D.) when kings granted franchises to specific people or groups to perform a certain type of commercial activity or hunt on their land. German breweries in the 1840s also used franchising to distribute their beer to different geographic areas. The breweries granted the franchises to certain taverns to be the sole distributor of their beer in a specific area. Isaac Singer was known to pioneer the use of written franchise agreements. In the 1850’s, Isaac Singer started granting franchises for its sewing machines because he wanted to distribute his sewing machines to customers

When buying into the company you sign a contract to firstly “buy” into the company, and then you have to pay royalties and a certain percentage of your earnings back to the head company. A positive of franchise agreements is that it allows companies to enter into the foreign market place with out having to put too much money into it. For example, 7- elevens in Australia are all franchises, the fist few franchises in Australia would have been set up as an experiment to see whether the Australian public would embrace the new chain store. The feedback would have been that Australia was pro 7-eleven and now you can walk through the city without seeing one on every corner. Another positive of selling your company as a franchise is that you can earn royalties. Different franchises have different royalty schemes, many expect you to pay a certain fee for the “name” each year and then pay them a percentage of the earnings. 7-eleven was taking 51 cents of every dollar made. This allows the head office to make money on the side while not having to invest more money into a situation where it could

The franchise operations division comprises the operating activities of the company 's franchise business unit, which licenses qualified operators to conduct business under the Panera Bread and Paradise Bakery & Cafe names and also monitors the operations of these bakery-cafes. Under the terms of most of the agreements, the licensed operators pay royalties and fees to the company in return for the use of the Panera Bread and Paradise Bakery & Cafe names.

Manufacturering and retail-Manufacturer has rights to disseminate products makers and franchisees, and the producer 's name and proprietorship that permit the proprietor to utilize trademarks.

The role of franchising in national economies is becoming more important by creating employment opportunities and service prevision . Franchising is the fastest growing from of retailing and a major portion of this recent growth can be attributed to the emergence of multi-unit franchising. Multi-unit franchising (MUF) refers to an organizational arrangement where one franchisee operates two or more franchised outlets in the same franchise system. In USA 20% franchisees operate more than half of the franchised outlets. The multi-unit franchising phenomenon can be divided into two categories : sequential multi-unit franchising and area development multi-unit franchising. In the first type one of the existing franchisees is granted a

The word "franchising" comes from the old French term defining the right for freedom of conducting any activity, for example, carrying out fairs, the organization of markets, operation of ferries and crossings, the right for hunting, a construction of roads or production of ale. In the Middle Ages kings had such privileges providing franchises on commercial activity of any type possessed.

Advantages & Disadvantages of Franchising Franchising is ‘a continuing relationship in which the franchisor (the owner of a company) provides a licensed privilege to the franchisee (the buyer) to do business and offers assistance in organising, training, merchandising, marketing, and managing in return for a consideration. It is a form of business by which the franchisor of a product, service, or method obtains distribution through affiliated dealers (franchisees).’ (http://www.business.gov) A franchise is essentially a replica of an existing business. When you purchase a franchise, you buy the rights to use the parent company's name and to sell its product or service in exchange for an up-front franchise fee and ongoing royalties, which