San Francisco Coffee Company Essay

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

* Establish a positive image with the local university to create additional long term clientele.

While doing some research I found that a franchise agreement is a binding legal contract that is signed between a franchisor and franchisee. A franchisor is the company owning the rights to grant franchises to franchisees, while a franchisee is a person or entity who is given the right to conduct business by a franchisor or licensor. The most important definition however is that of a franchise which is an authorization granted by the government or company to an individual or group allowing them to carry out certain commercial activities.

1b) What advantages are there to not franchise the restaurants? Do you think they ought to franchise restaurants down the road? What advantage would that be for the company?

And franchisors, by design, exert indirect control over their franchisees and franchisee’s employees by way of licensing out the operation of their brand. In traditional franchise agreements, the franchisee is an independent business owner with a license to use the franchisor’s trademarks and other intellectual property as part of a royalty or fee arrangement. The ruling, which states that “setting productivity standards” is a form of indirect control, understandably has franchisors and franchise attorneys seeking shelter.

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

• The most critical opportunity is the location(s) of expansion. Focusing on long-run profit potential would be expanding in a familiar ‘home-base’ region. From the alternatives, a location(s) that could achieve all key success factors coupled with a strong Franchisee base (that meets required criteria) would be the first step to the desired goal of the revenue growth process. From this foundation, a critical path to overcome market entry obstacles would need to be addressed.

According to the Franchise Law Journal, the franchise relationship consist of four elements: (1) the franchisor’s grant to the franchisee of the right to sell the franchisor’s goods and services, (2) a trademark that is licensed to the franchisee, (3) a community of interest wherein the franchisor exercises some measure of control over the franchisee, and (4) a fee paid by the franchisee to franchisor (Binford, Jason). The relationship is continually built from the agreements of business transactions and contracts that are very precise. After so much research within the 2, I would consider them as business partners instead of separate business parties because if it were considered a party, they would not have similar interest in the company’s future plan, in that case their would be

Based on mentioned environmental factors, exporting is chosen to start in the Japanese market. Direct exporting is more favorable, as more control over its international operations (including other MKC international markets) and which might lead to significant sales /profit return. A subsidiary in Japan will then established and hire strong local nationals as country manger, giving them specific strategic direction and clear profit-and-loss responsibility.

The basis of the franchise agreement is to detail the strict operating standards by which the Taste of Philly franchise is requiring the franchisee to conduct business operations while using its intellectual property, marketing plans, and general operational guidelines (Taste of Philly Sample Franchise Agreement, 2012, p.8). Freedom within the framework is not something that should be expected from the franchise business model; the main purpose behind entering into a franchise agreement to receive proven structure or framework. However, some franchises are allowed to make local connections with the approval of the franchisor.

3. What is your assessment of the competitive strength of Kraft Foods’ different business units?

The lesson learned from this is that sometimes it is easier and faster reach a new market via joint venture, even though the profit will be less, but the company can save a lot of money in studying the new market trying to understand the new culture and how they purchase and also it can minimize the risk because there is a national brand supporting the new international brand, which gives confidence and security to the customers.

The 3 entry modes present different advantages and drawbacks, Franchising Strategy showed low control in the operations, low risk of exposure, low investment and high support from the local partner. Joint Venture entry mode indicated moderate-high investment, moderate risk, medium exposure and moderate control. Lastly, Greenfield entry mode denoted high risk, high investment, high control of the operations and high exposure.

The positive outcome of this strategy is that the company is easy to control the market. It is because through the franchising, the local company needs to get the agreement contract from the main company. The local company can manage the local market well because it has already familiar with the cultural of that country. The negative outcome is that the local company didn’t follow the rules that have set by the main company and boycott them because they take control of the business.

Many coffee companies are currently in the market, making competition fierce. Although Starbucks has a strong reputation in North America, direct and indirect competitors still pose a threat. To establish market niche, competitors use location,