The Business Model Of Business

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

The aim of this assignment is to describe the different types of businesses that operate in the UK. This will include the comparison between a franchise and a public sector business in terms of ownership and purpose.

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

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.

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 example is a children?s clothing store. They must be able to understand what has made their competitors like Carter?s and

Not having to answer to a corporate boss is the dream of many and the flexibility that owning a business franchise creates provides this option. Success is not reached by simply creating a business, however. The level of success is measured by the size and efficiency of the business. Business growth is the driving force of the economy. The additional jobs and revenues created when a business expands allow the economy to grow at exponential rates. One of the fastest and most popular ways to increase the size of a business is to turn it into a franchise, which can then be purchased by individuals. Franchising provides opportunities that are beneficial to both the parent company and the purchaser. The company that owns the business can expand

A person who purchases franchise called franchisee, and the firm that sells franchise called franchisor. Franchisee and franchisor have to agree on a compromise, both sides need to sign in the business contract and follow the cooperation legislations that are normally set up by franchisor. Commonly, franchisor is profitable by the royalty payment (the commission that is paid by the franchisee as it sold the products). Brand recognition is also beneficial for the firm because it would gain more reputation from franchisee stores which are located in diversified distinctive markets. Franchisee makes the benefits from selling products or services of well-known brand name. Moreover, this is a safe starting method for people who are new to business as the low starting risks and the existing reputation. As the result of these advantages Franchising is a popular trend in plenty economies from several nations, it not only allows national businesses to purchase and run a franchise stores, but also foreign entrepreneurs are welcomed to participate in the franchising form.

RQ1. The business model (BM) delineates the logic of how an organization creates, acquires, and delivers value and facilitates the organization’s strategy implementation through the organizational structures, processes, and systems (Osterwalder & Pigneur, 2010). The BM seeks to establish and maintain a relationship with a targeted demographic through the provision of benefits that solve a problem or meets a need. This value proposition is available through key resources, activities, and partnerships in respect to the cost structure and is delivered to the customer through channels; the value proposition returns to the organization in the form of revenue stream.

Franchising has always been an effective and efficient means of expanding businesses and there is a firmly established franchise market in the United States and the United Kingdom. Franchising offers several advantages, such as relatively unsaturated markets, transitioning economies, free-trade zones, friendly business laws, and liberalized markets and most of which come from emerging markets. Lots of multinational companies have chosen to franchise as a means to enter the emerging markets because it is governed by a contractual agreement which provides a desirable competitive advantage. (e.g. Paswan and Kantamneni, 2004; Alon, 2004). Trying to Explain the extraordinary growth of restaurant franchising within the United Kingdom and the United States has been one of the major focuses in the academic franchising literature over a couple of years. In the United States, United Kingdom, Canada, and some other parts of Western Europe, restaurant franchising has attained domestic market saturation, consequently, emerging markets stay relatively unexploited. The establishment of Restaurant franchising in emerging markets is primarily within the last 20-30 years through corporate franchise agreements and master franchises, and to some extent, conversion franchising and joint venture franchising (Alon, I., Falbe, C.M., and Welsh1

This capital acquisition explanation argued that organizations were forced to resort to franchising because it allowed them to expand quickly without having to source scarce external financial resources or to relinquish control as in a joint venture or stock market operation (Caves & Murphy, 1976). Thus, over time, it was expected that franchisers would repurchase or take over the (best) franchised units in the system and eventually become fully company owned (Oxenfeldt & Kelly, 1969). However, research into this phenomenon has produced mixed results in the United States (for example, Hunt, 1973; Brickley & Dark, 1987; Lafontaine, 1992). Moreover, it has been found that where ownership redirection occurs it is ‘‘more strategy driven than opportunistic’’ (Dant, Kauffman, & Robicheaux, 1998, p. i). Indeed, Blair and Lafontaine (2005) comment that ‘‘most franchise chains are hybrids: partially vertically integrated and partially franchised’’ (p. 107). In contrast, while some large fast food chains (such as McDonald’s) strategically ensure a mix of franchised and company-owned units, most franchise systems in Australia are almost fully franchised (Frazer, Weaven, & Wright, 2008). Hence, different franchising models are employed around the world, and there is no ‘‘one-size-fits-all’’ approach. An alternative explanation of franchising, first put forward by Rubin (1978), focuses

Opening a franchise company has its entertainment and guaranteed security . While the built-in brand recognition is a good start-up, that brand has not reached the level of some of the largest restaurant in the Victoria but it is on the way of others . The franchise brand may not provide the level of support expected from a larger franchise chain. but the combined management experience, and synergy between the goals of the franchisor and the company 's goals will lead to the long-term success of our franchise

Michael Lewis (2000: pages 256-257) scoffed at the whole attempt to formalize the definition of business models when he wrote that “ “Business Model” is one of those terms of art that were central to the Internet boom: it glorifies all manner of half baked plans. All it really meant was how you planned to make money.”

According to me a franchising is an arrangement in which one party the franchisor allow another party the franchisee the right to use its trademark, company’s name as well as certain business systems and processes, to produce and market a good or services according to certain condition.The franchisee pays one time franchisee, royalty and profits.It helps franchisor to expand his business. Assistances provided to franchisee by franchiser are Marketing, management, advertising, store design, standards specifications etc.

A franchise contract is a form of organization involving two independent firms with the aim of selling goods and services in a specific area ( “How to influence franchise contracts: the Spanish case”Alicia Garci’a- Herrera, Rafael Llorca-Vivero, 2009). Another resource- Business dictionary describes franchise agreement as a contract in which well-established business provide its brand, operational model and required support to another party in order to set up and run similar business. This costs a fee and/or a part of generated income. This distribution technique increases competition between companies producing similar products or services by high efficiency and transaction costs reduction. By this distribution technique the franchisor gains access to more new markets, can raise profits, decrease costs and share risks while still controlling the new franchisee. This collaboration is very important for small and medium businesses. In 2009, a third of retailing networks in US were by franchise contract, in EU impact is smaller but is also growing (Garci’a- Herrera, Llorca-Vivero, 2009).