Franchising : An Exciting Venture Essay

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

Franchising: it is a relationship in which the owner of the business allocates to independent individuals the right to market and distribute the goods or service, and by using the business’s name for a fixed period of time. The International Franchise Association defines franchising as a "continuing relationship in which the franchisor provides a licensed privilege to do business, plus assistance in organising training, merchandising and management in return for a consideration from the

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

According to Daniels(2004), franchising is a specialized form of licensing in which the franchisor nor only sells an independent franchisee the use of the intangible property (usually a trade mark or patents) essential to the franchisee’ business but also operationally assists the business on a continuing basis, such as through sales promotion and training.

Unlike starting a new business from scratch, many new business owners decide to buy a franchise. They get a proven business model, the buying power of a large chain and consumer awareness of a large brand.

Combs J.G. and Castrogiovanni G.J., (1993) argued that a franchise is an organization designed to allow franchisors to obtain the resources needed to accelerate the growth of the company, with the aim of reaching a minimum level of efficiency and thus strengthen the brand awareness.

To begin with, the concept of “franchising” originally appeared in Britain in the 10th century and as a term described a variety of benefits, which were provided to the citizens in the context of the electoral process. However, the revival of franchising as a modern business institution is marked by the year 1840, the year of the appearance of the first worldwide franchise network (the system of “tied pubs”) in the UK, which was used by the brewers in order to maintain the necessary volume of sales. In fact, the “tied pubs system” operated in accordance with the following principle: in exchange for a loan or rental property a brewer was provided with an inn, that is, with the possibility to sell beer and alcoholic beverages (Lashley & Rowson, 2002). At this point, it should be noted that the abovementioned system still exists these days, which illustrates the effectiveness of such type of business.

Franchising can be defined as a business venture between an individual (Franchise Owner) and the franchisor (Business Owner), who wants to expand the scale of their business to promote visibility of their particular brand and thus increase market shares. In India, franchising is growing exponentially over the last handful of decades along and the trend seems to be growing at an extremely strong pace. According to the experts, franchise business is probably the safest modes of businesses because it involves lesser investment with greater ROI. That's why increasing numbers of people are actually moving on the lucrative world of franchising.

Sometimes the costs we spend for the franchising may be huge than if we begin our own one from the scratch. Because we may have to pay for marketing, advertising and agreed percentage of our sales than the initial cost. Then sometimes they will go for loans for further development. If the franchise go for down. It will

“A franchise is a business system in which private entrepreneurs purchase the rights to open and run a location of a larger company. The franchising company, or franchisor, signs a contractual agreement with the franchisee, explaining

An agreement or licence entered by two parties is known as a franchise. Franchising is a method that businesses use to market and distribute their products. The Franchisor gives rights to the Franchisee to market their brand or product by using their trademark, Franchisors also support Franchisees on an ongoing basis. There are two different types of franchising which are business format franchising and product and trade name franchising. Business Format franchising is when a franchisor offers the franchisee a package of deliverables and services which include the use of their logo and trademark and assistance with site location selection, hiring and training of staff, equipment, design and layout of the store etc. The franchisee has to pay a continuing fee in return for the packaging services that the franchisor is offering and sign a contract. Product and trade name franchising is when the franchisee doesn’t have to pay an ongoing fee

& Wang, Y. (2012) narrated that franchising is quite similar with licensing but comprises long-term commitments whereas licensing comprises short-term commitments. Franchising is a right that a parent company gives to other business by allowing to do specific company activities such as selling product or service with the name of parent company, for example McDonalds and Starbucks Coffee. A company selling franchise receives royalty payment related to franchisee's revenue. Parent company avoids many costs and risks of opening in a host country. A company using franchise entry mode can build great market place all over the world within short time at relative low risk and

Franchisees are normally well established as part of the local community, either on a personal level or as a result of their past business activities. This can give them a very significant advantage in gaining new business for the franchise at a local level. They will generally live within the franchise territory, be known there and will be seen as having made a permanent commitment. The franchise system can provide a very cost-effective route for business development, but only provided that the original business is successful and that the franchisor is willing to invest sufficient an attractive franchise opportunity. The benefit of self-financing business units and a simplified management structure as

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

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