The Success, And Rescussion Of Coffee Day Xpress (CDX

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.

Franchising is simply a method for expanding a business and distributing goods and distributing goods and services through a licensing relationship. In franchising, franchisors not only specify the products and services that will be offered by the franchisees, but also provide them with an operating system, brand and support. (Franchise.org, 2016)

Franchising is a well-known business and commerce procedure that brings together the title-holder of recognized merchandise with another business or products. This system is readily used by small businesses and companies to provide as a mean to provide authentication and support for their business by having a brand name of a well-known company associated with it. However like most business entry strategies franchising to has some

According to Daniels(2004), franchising is a specialized form of licensing in which the franchisor nor only sells an independent franchisee the use of the intangible property (usually a trade mark or patents) essential to the franchisee’ business but also operationally assists the business on a continuing basis, such as through sales promotion and training.

Franchising can be defined as a business venture between an individual (Franchise Owner) and the franchisor (Business Owner), who wants to expand the scale of their business to promote visibility of their particular brand and thus increase market shares. In India, franchising is growing exponentially over the last handful of decades along and the trend seems to be growing at an extremely strong pace. According to the experts, franchise business is probably the safest modes of businesses because it involves lesser investment with greater ROI. That's why increasing numbers of people are actually moving on the lucrative world of franchising.

Regrading the staff recruitment within franchises, only franchisee is responsible for this task. Furthermore, franchising increases market penetration, it means franchisees appear to be part of local community and this gives them an opportunity to gain new business. International potential is also included in franchising list of advantages. If a company has serious intentions to expand its business internationally, franchising multiplies chances to achieve such a goal. It allows to adapt the business to the foreign market. As a result, it is obvious that there are numbers of reasons why franchising is useful and beneficial for business(“Reasons For Franchising Your Business”,

Furthermore to this is the discussion of management themselves. Steward et al (1989) cited in Zhao (2005) highlights the difference between a small business manager and an entrepreneur:

Today, franchising is a highly regulated industry which offers a great opportunity to those individuals who truly want to realize their dream and go into business for themselves.

It is the authorization or a license given to an individual or a group by a government or company allowing them to carry out commercial activities. Examples of franchise would be providing a broadcasting service or acting as an agent for a company’s product. Franchising is one of the three strategies that businesses use to gain market share. Companies that want to give a good image of their products to their customers, use franchising. It is also a method used to satisfy customer needs. An advantage of franchising would be, having a certain level of independence.

The purpose of this paper is to shed some light on the concept of franchising from the viewpoint of the franchisor, discuss its different uses taking into account the advantages and disadvantages attached to them, and link these considerations to a firm’s internationalization decision-making process.

Franchising as business framework became popular in the middle of nineteenth century in the USA within hospitality service sector (Fulop, 2000; Mansfield & Killick, 2012; Taylor, 2000). Along with globalisation and expansion of the biggest franchisors of the US such as Starbucks, McDonalds and Holiday Inn to foreign markets, franchising as a form of business rapidly entered and became a part of the service sector of the UK (Mansfield & Killick, 2012). The most typical form of franchising is described by the legal right given by franchisor to franchisee to sell goods and services under the franchise brand and to implement existing business model which includes continuous support in return for a fees paid by franchisee (Benjamin et al., 2006; Fulop, 2000; Lashley & Morrison, 2000; Mansfield & Killick, 2012).

The purpose of this paper is to shed some light on the concept of franchising from the viewpoint of the franchisor, discuss its different uses taking into account the advantages and disadvantages attached to them, and link these considerations to a firm’s internationalization decision-making process.

Franchising is a common term in daily life, business discourse, and the law. Nevertheless, the term is used in different contexts and with different meanings. Coughlan, Anderson, Stern, and El-Ansary employ the European Union’s description of franchising as a “…package of industrial or intellectual property rights.” The EU identifies three features of franchising—a common name or sign, with a uniform presentation of the premises, communication of know-how from franchisor to franchisee, and continuing provision of commercial or technical services by the franchisor to the franchisee.

Franchising is a long-term cooperative relations between the two entities, one or more franchisor and franchisees, based on an agreement where a franchisor gives the franchisee for licensing privileges to business. Franchisor grants the franchisee the right to use development concept, including trademarks and brand names, production methods and marketing services and all operating business model, for a fee.

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.