Managing Financial Resources and Decisions Essay

Finance. In order to finance our startup year, we issued stocks and borrowed loan to finance our operation and for safety in case the sales did not go well. Financing using stocks means that we are selling common or preferred stocks to individuals. In return for the money, they get some ownership over the company and its interest. This helps to bring public’s awareness about the company. If the sales suffice, we will pay the debt in the second round.

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

Because of a recent economic downturn, there may be an opportunity to negotiate new lease opportunities at even better rates. Also,franchising the Sandwich Blitz shops seems like a great opportunity for expansion beyond Dalman and Lei’s current large metropolitan area. This would require training upfront on Dalman’s part to insure the same quality and consistency in the food preparation. However, once the franchisees’ shops were established, there would be less time Dalman and Lei for any specific issues, as the franchisee would be responsible.Dalman and Lei can participate in the profitability of these franchises without the same level of management that is currently required. This opportunity would also potentially be less risk for the company as a large amount of capital would not be required in the expansion.

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.

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).

The benefit to McDonald’s of operating franchised restaurants is that these restaurants guarantee a stream of income for McDonald’s at a reduced level of risk while enabling the company to maintain a single brand presence. The risk to McDonald’s is reduced because much of it is borne by the Franchisee. The Franchising Accounts team works closely with franchisees to provide the support they require to grow their profitability. It is the responsibility of the senior management at McDonald’s to reinvest the profits made by the company in order to generate future cash flows and returns for the shareholders. Whether this is done by building new restaurants, reinvesting in existing restaurants, paying off debt to reduce financing costs or paying a dividend to shareholders, their decisions will be based on financial appraisals carried out by the McDonald’s Finance team.

If the application is approved. A financial advisor is assigned to the hopeful franchisee in which help is awarded with finances and applying for a franchise loan.

Getting funding for any startup business can be a challenge, and financing a restaurant poses challenges unique to that industry. Since many restaurants may struggle in their first few years of operation, traditional lending sources are not typically eager to extend business loans to restaurant owners. This leaves such entrepreneurs with fewer traditional options; but the possibilities in alternative lending can give restaurant owners the financial boost they need to get started or keep going.

Introduction Opening up a business such as a franchise can carry many risks, both financially and personally but can also be very rewarding and challenging. Some people make a decent living, some end up rich, then again, plenty of people fail. (MSNMoney, 2014) There are many advantages of owning a franchise. Some advantages are that you have association with a well-established brand, reputation and product or service, access to established standard procedures, operating manuals and stock control systems.

* Franchise Financing: Financing new locations, acquisitions, reimaging, debt restructuring, refinancing. Franchise restaurants, chain restaurants and limited service hotels.

At present concept of franchising and management agreements appears to be common in business, because these agreements can benefit both sides. Franchising is one of the most frequently used and wide spread tool for the business development all over the world. This tool contributes to the rapid extension of the different networks of numerous companies, which without its development would have no such chance of success. The most successful franchises connected with the everyday human needs. According to Kathryn Shaw, franchise “is typically defined as a contractual arrangement between two legally independent firms, whereby the franchisee pays the franchiser for the right to sell the product or the right to use its trademarks in a

One of the key strengths has been the successful establishment of the franchisee business. The company’s relationship with

Every business involves risks and problems, however most of the problems can be resolved by investigating the root cause of the problems and fixing it. I have been searching about the problems associated with buying a franchisee of McDonalds, and the main problem is arranging the capital to support my business plan. I have researched few private and government loan providers. According to franchise directory, McDonalds provide four different types of franchises in India such as traditional restaurant, satellite locations, STO and STR locations and BFL franchise. Traditional restaurant franchisers are eligible to locate in freestanding building and food courts. Satellite location franchisers can open McDonalds in airports, universities

Franchising has been long known to be an exciting venture for any person who wishes to buy into the idea (Timmons and Spinelli, 2008). There is an assortment of elements that combine to ensure a correct franchise opportunity is formed, which set the guidelines to ensure a franchisee is not being induced into an unfair agreement. No successful franchise would be established without following the four cornerstones of franchising (Webber, 2012 pg. 13), this includes: the license itself, the assurance that the franchisor has rightful ownership to the company, the franchise agreement itself and the structure of how the fees will be set out (Webber, 2012).

FRANCHISE OWNER: So...you want to become your own boss? Do you want to have your business at low risk potential. Franchising is a great option then which can be chosen but sometimes it requires certain capital as per the franchiser’s policies.