Why Would A Person Want To Own A Major Well-Known Franchisor?

I am currently in a position in my life where I am working diligently to prepare for my future. While I have a Master’s degree in Clinical Psychology, I have always been entrepreneurial in nature and remain open to any opportunity to better myself personally and professionally. I believe that operating a franchised restaurant business would be an incredible way for personal and professional growth, in addition to helping my

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

Schlosser tells us about how many companies expand their businesses by selling franchises. Selling franchises has been successful for many companies such as McDonald’s, Subway, and many others were able to expand using this route. In fact, some fast food companies open up some many franchises, that whenever the same restaurant is opened close to another one, that managers complain of losing business. Another thing the books informs us on is that when a franchise doesn’t work out then the fast food company has no choice than to close that area. Subway does this very often and is called “The worst franchise in America”. Next, the book talks about economics. There is a lot of risk taking when it comes to being a franchisee for a fast food restaurant. People who would like to become future franchisees can spend almost 1.5 million dollars just to become one. Before purchasing a franchise, people have to consider whether or not it will be worth the money, because if it doesn’t work out there is no way that

1b) What advantages are there to not franchise the restaurants? Do you think they ought to franchise restaurants down the road? What advantage would that be for the company?

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

Buying a franchise may reduce your investment risk by enabling you to associate with an established company. But the franchise fee can be substantial. You also will have other costs: for example, you may be required to give up significant control over your business while you take on contractual obligations with the franchisor.

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

An easier alternative to starting a business from scratch is purchasing an already established one. This can be achieved through purchasing a franchise, a business that follows an already established model. Before one purchases a franchise, they must obtain specific information to know whether or not the venture is worth it. One franchise that is growing in popularity is Buffalo Wild Wings. Although it is growing in popularity and success, is purchasing a Buffalo Wild Wings’ franchise worth it?

One of the key similarities between these two types of ownership is liability. The franchise and public limited company have limited liability. This means protections of their shareholder from losing their personal finances if the company goes bankrupt. If the company fail they only lose their invested money in the business. If business wants to become a limited liability can it be complicated and expensive to set the business, decisions can take longer and it takes a lot of legal requirements.

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 case depicts KRISPY KREME 's franchise system growth and decline as a lesson to entrepreneurs running a company as a franchisor.

It has its advantages and disadvantages to franchise the business. It is a careful decision to make for anyone to invest a lot of money into a franchise and everyone should be comparing pros and cons.

Franchisors are increasingly having to be more and more selective in the adoption of franchisees with factors such as economic climate and the potential difficulty with growth playing key factors in the decision making process. It is not simply an ability to grow which creates a successful Franchise and nor is it the desire of any franchisor to adopt every potential franchisee. Franchisors are becoming more and more scrutinising as the global economy declines. There is a general understanding within any franchised

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

When people think about the franchising concept, McDonald's usually comes up first as a prime example. Although McDonald's was not the first franchise business Isaac Singer, the inventor of the sewing machine gets credit for originating the franchise idea-the hamburger chain certainly exemplifies franchising success.