Franchisors Do Not Like to Take on ‘Entrepreneurs’ as Franchisees. Discuss This Statement, Giving Sound Reasoning Why This Statement Might Be True and Countering with Arguments Against the Statement?

“Becoming a franchisee is an odd combination of starting your own business and going to work for someone else” (Schlosser 94).In Eric Schlosser’s Non-fiction book, Fast Food Nation, Schlosser reasons that fast food has widened the gap between the rich and the poor, started an obesity epidemic and propelled American cultural imperialism abroad. While the idea of a franchiser/ franchisee relationship appears to be nothing but beneficial, it has a serious drawback, which is the release/ acceptance of certain issues out of each party’s control. This, in turn causes other companies to try to develop new ways of forming this relationship. Subway, for example uses “Development Agents” to help ease tensions.

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

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

When restaurants not do franchise they maintain uniformity in service and quality which can be monitored and evaluated by Corporate using the same standards. The rigidity will ensure consistency for the chain. There are some monitoring costs that emerge when a company decides to franchise its operations. These monitoring costs are costs involved with making sure that employees at the franchisee work hard and follow the rules. This requires hiring supervisors who will monitor the employees, but somebody needs to monitor the supervisors and so forth.

Systematic Approach- most franchises investors doesn’t like making new rules. They like to use previously used systematic approaches that are profitable. They like learning from others mistakes for faster success

A good franchise offer training and support as owner will not know how to run Jiffy Lube or Subway without guidance. Franchisor have advantage from buying power and efficiency due to large scale of franchise so they can negotiate lower prices for the products and services needed to run business. The startup cost can have a wide range depending on the franchise, therefore most franchise have financial loan program (Geoff, 2013).

Today’s generation is filled with people who want to own their own businesses and be their own boss, however, crossing an individual who intends on building their ideas from the ground up is rare because the process absorbs time and finances. For this reason, franchises are becoming more popular in the business world. In this system, an established business sells a portion of temporary ownership to a franchisee, in which the franchisee must incorporate the franchisor’s existing framework and practices in exchange for a managerial role. The franchisor Findings Popeyes Louisiana Kitchen Franchise Popeyes Louisiana Kitchen creates, runs, and franchises restaurants that specialize in the quick servicing of spicy chicken, buttery biscuits, red

In the article “The Franchisees Are Not Lovin’ It,” the authors, Gruley and Patton, discuss the difficulties of the McDonalds franchise, the struggles of the franchisees, and the inability to solve these problems. The article goes on to talk about how McDonalds needs to get back to basics, just as they say themselves. Yet, they continue to make the menu more complex by the constant introduction of new foods. They are getting away from their identity as a burger joint. As a result they are closing restaurants and are continuing to experience declining revenue. McDonalds isn’t what they used to be and something needs to be done to improve the well-being of the company, the franchisees, the employees, and most importantly the customers.

Franchising is defined as “a commercial agreement between a party that owns a trade name or trademark (the franchisor) and party that sells or distributes goods or services using that trade name or trademark (the franchisee) (Kubasek et al., 2015, p. 431). There are key advantages for choosing a franchise when starting a new business. First, there is many times instant brand awareness that is identifiable by potential customers, which you as a new owner do not have to concentrate on building. Secondly, on-going marketing of your business is backed by the power of the established brand, and could be as simple as contributing a fee to a advertising fund that is driven by the franchisor. Thirdly, the Return on Investment (ROI) will most likely be faster as the customers are “ready-made” and eager to buy your product or service. Fourthly, the franchise model provides a built-in support model, both from the franchisor and from other franchisees throughout the region and nation. Lastly, the franchise will provide consistent and extensive training in every aspect of the business (Goldberg, 2015).

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.

This would be critical in the business’ ability to survive in such a monopolistic type market. Successful operation within a smaller independent chain restaurant faces challenges that may not be as apparent to a larger and more established national chains.

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.

The benefits of standardisation, as well as the risks should be understood. A top down standardisation of concept precludes the bottom up learning that is necessary to adapt to dynamic markets. Moreover, it is the franchisees - who are close to customers, markets, and employees - who have the most intimate information about changes in demographics, markets, and customer tastes that are most likely to affect the future direction of the business. Yet, these people are precluded from innovating or customizing the concept to experiment or take account of local and/or changing market conditions.

‘As a result, expansion can proceed at a much faster pace than would otherwise be possible, enabling the franchisor to achieve increased market share whilst benefiting from economies of scale.’ (http://www.butterfield.co.za) Finally, franchisors can benefit from the cultural knowledge and know-how of local managers. This can be helpful in lowering the risk of business failure in unfamiliar markets, as well as creating a competitive advantage. Franchising offers franchisees the advantage of starting up a new business quickly based on a proven trademark and way of doing business, as opposed to building a new business from scratch. The franchised business is based on a proven idea and has an existing customer base, therefore making it much easier to sell your product than it would if you were to start up your own business.

There are two important roles in franchising are the franchisor and the franchisee. The franchisor is the owner of the brand, product, or service, while the franchisee is the party that pays for the right to use the brand, product, or service. Usually the franchisee “pays a one-time franchisee fee plus a percentage of sales revenue as royalty” (What is…, n.d.). Unfortunately the franchisee fee does not include all of the necessary start up costs. There are many other fees and costs to be expected in order to successfully start up a franchise. These costs are worth it to franchisees though, because once the fees are paid they “gain immediate name recognition,