Rocky Mountain Audit

Moreover, it can be expected that the store growth rate may be able to sustain 4% in 2003 and franchise store revenue growth is still high, as the number of area developers’ increase. In addition, due to area developers pay a higher royalty rate, which is 5.5%, than old associates’ 3%, royalty revenues have been increasing in a long time.

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

After the recovery process was completed, the patient was placed in the care of the discharge nurse. She was given a report and was aware that the mother had not showed up to collect her child and several overhead pagers had been performed. While the interview was taking place the nurse stated that she was unsure how to proceed, with the mother not being located, the nurse stated that she was relieved when she was informed that the patient father was there, the discharge nurse stated that the

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

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

LCC has conducted an audit of Apollo Shoes, Inc. balance sheets, the retained earnings, cash flows, and other related statements of income for the year ended December 31, 2006/2007. Apollo Shoes Inc management is responsible for maintaining the effective internal controls that goes along with the financial statements and how well the accuracy is going to be. LLC has evaluated the effectiveness of the said controls and with everything to see the relevance in the timing, the substantive in quality, and the comprehensive in nature. The responsibility of our firm is to express an opinion that is supported by audit evidence in

Internal audit- In-house assessment to ensure that all policies and external standards are followed, implemented, and operating effectively.

The largest opportunity Chick-fil-A has is expanding brand recognition in areas that already have units, and also expanding to locations that have little exposure to the brand. Chick-fil-A units are performing at near maximum capacity and the company could benefit through increased unit locations. Currently, Chick-fil-A has more than 1300 locations nationwide, compared to McDonald’s 31,000. (Hoovers.com, 2008) Chick-fil-A has already addressed the issue, commenting that the company is very strict in choosing unit locations and operators, and that Chick-fil-A does not want to outgrow capacity. Truett Cathy believes this selection process is the reason for much of Chick-fil-A’s success. (Cathy 2002) Chick-fil-A has constant pressure from the

During the first safety audit of the season, the Village of Orland Park Centennial Park Aquatic Center earned a five-star rating. A surprise risk management audit was conducted by the water safety organization, Starfish Aquatics Institute. Aside from performing risk management audits, the institute offers training courses.

387). It is beneficial for both parties in its ideal state, because on one hand the franchisor obtains new sources of expansion capital, self-motivated vendors for its products, and therefore an opportunity to enter new markets and increase the market share. On the other hand, franchisees gain products or services, expertise, and the stability usually reserved for large and reliable enterprises so that it may lessen the risk for them when they start a new business. Thus, it is essential for new businesses to build up this channel relationship by buying a franchise from a large, dominant franchisor with a well-managed franchising system. In TCBY’s case, it is strongly evident that one of TCBY’s strengths is its franchisee support program. The company provides sufficient operating manuals and marketing materials to assist its franchisees so that they are likely to have sound understanding about store operations. Also, a new franchisee of TCBY has easy access to many items needed for start-up and for day-to-day business. As a result of TCBY’s well managed franchising system, it leads to a 30 percent market share for TCBY in the late 1980s.

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

♦ Reliance on franchising "associate" stores and opening a few new company-owned stores as a means of expanding nationally and internationally. However, franchise licenses were granted only to candidates who have experience in multi-unit food establishments and who possess adequate capital to finance the opening of new stores in their assigned territory.

‘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.

Another clear obstacle and vital factor is competition, which for this franchise range from household product shops and apparel retailers. The direct competition includes stores like IKEA, Costco and UNIQLO. All these business are successful worldwide, and continue to grow in consumers on a daily basis. When establishing the MUJI franchise in its location, the franchisee must take into account the surrounding stores which may pose a threat, and decide to make a few changes to stay competitive.