Essay On Franchisee

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

Franchising is simply treated as for expanding a business and distributing goods and services through a contract based relationship. In franchising, franchisors [whose business is handed over to a third party to manage, and with its trademark] not only specify the products and services that will be provided by the franchisees [a person or company who is given authority to do business under the trademark and trade name by the franchisor], but also provide them with an operating system, brand and support.

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.

This Literature review explains if a franchise is high or low risk way of entering into a market. It also explains whether a franchisee is suited for a certain franchise. Franchises can be seen all over the world, with everyone being introduced to them, as consumers, from a young age (Longenecker et al., 2011). Thomas and Seid (2000) agree with this and believes due to it, people think they understand a lot more about a franchise than they actually do, creating myths about the rate of success and the ease of entry. Antitrust Law and Economics of Product Distribution (2006, p.5) defines a franchise in a 3 part way as, “(1) a franchisee (a) offers, sells or distributes a franchisor’s goods or services, which are identified by

I. What steps should you, the prospective U.S.-based franchisee take when establishing outlets in foreign countries?

1. A Franchise is when a franchisor of a business gives the franchisee of another business the right to supply its product or service under the same brand identity. Specsavers is a very successful franchise for example.

According to Daniels(2004), franchising is a specialized form of licensing for the franchisor. Not only sells an independent franchisee the use of the intangible property essential to the franchisee’ business but also operationally assists the business on a continuing basis through training and sales promotion.

The franchisor markets a unique business system under a trade name and franchising adopt the standardise procedures to run their own business.

In this report I will be talking about how to open a LaRosa’s pizza restaurant franchise. There are many requirements that you have to fulfill to qualify for the franchise. There are 8 steps to open a franchise with them. In the restaurant business, somebody is always trying to franchise "the next big thing.” No doubt you 've seen dozens of them come and go. Doesn’t it make more sense to find a stable and rewarding business concept with a strong track record? (LaRosa 's, franchise). These are the reasons they thought why they should become a franchise. They also think since that since they have been doing been doing well for over 60 years they thought they might just as well allow franchising and broaden their area

Franchising systems can be broadly divided into two types. "Product/Trade Name" franchising is a relationship between the supplier and the dealer in which the dealer agrees to acquire some of the identity of the supplier in order to become the preferred source of the supplier's goods. "Business Format" franchising is an ongoing relationship between the franchisor/franchisee that not only includes product, service, and trademark, but also the entire concept of the business (U.S. Department of Commerce 1988).

There are three primary categories of franchises. Product and trade name franchises, manufacturing and product franchises and business format or system franchises (Lagarias, 2010). Product and trade name franchises give the franchisee the right to distribute a manufacturer’s product in a specific territory or at a specific location. You can use their trade mark or trade name in exchange for fees or royalties. An example showing the right to distribute a product is gas stations such as Exxon. The second category is manufacturing and production franchises which provide the franchisee with a specific ingredient or a specific process of manufacturing the product. An example would be a soft drink company such as Coca-Cola. The third category is the business format or system franchises which adds on an additional layer – a business format or a complete way to run the business along with the business plan, management system, location, image, and the quality of the goods and services offered. An example of this would be a fast food chain such as McDonalds. At every McDonald’s location the hamburgers should taste the same (Franchises – an introduction, 2011, p.2).

In the modern world of entrepreneurship, motivated men and women are faced with the task of either creating their own business or taking on the marks and practices of another existing brand. The latter is franchising, and it presents a host of benefits and possible disadvantages to the aspiring inquirer. A franchise, by definition, is a binding, legal contract that enables the rights, marks, and other notable elements of a given brand, referred to as the franchisor, to be used by a second party – the franchisee (What is Franchising?, n.d.). Further expanding the opportunities available to new and veteran entrepreneurs is that franchises come in two distinctly different types: product-distribution franchises and business format franchises.

A person who purchases franchise called franchisee, and the firm that sells franchise called franchisor. Franchisee and franchisor have to agree on a compromise, both sides need to sign in the business contract and follow the cooperation legislations that are normally set up by franchisor. Commonly, franchisor is profitable by the royalty payment (the commission that is paid by the franchisee as it sold the products). Brand recognition is also beneficial for the firm because it would gain more reputation from franchisee stores which are located in diversified distinctive markets. Franchisee makes the benefits from selling products or services of well-known brand name. Moreover, this is a safe starting method for people who are new to business as the low starting risks and the existing reputation. As the result of these advantages Franchising is a popular trend in plenty economies from several nations, it not only allows national businesses to purchase and run a franchise stores, but also foreign entrepreneurs are welcomed to participate in the franchising form.

Franchising is defined as a business model wherein the owner of the business (franchisor) gives the independent operator (franchisee) the right to distribute his product, apply his business techniques and use his brand and/or trademark in the conduct of the business. With such a business model, the business owner can maximize their business’ profit potential in a shorter time compared to other more traditional business models. In franchise business, it is not only the products or service that the franchisee can avail; it is more of the system-the business plan of the chosen franchise. It is fact that before franchise companies offer their business packages, they already conducted strenuous