The Success Of The Franchise Industry

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

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

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

Franchising has many labels other people invest in a transaction or an accord; it may be a dealership, a license, a supply agreement, etc.; If an agreement/arrangement has all of the components of a dealership, it’s a franchise.

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

In a franchise, the Franchisor sells the rights to sell its proprietary good/service to third parties or Franchisees. Both of the parties then sign a franchise agreement, which lasts for any agreed period, but generally between, 5 and 30 years. Once the franchise commences to function the Franchisee pays a royalty payment has to the franchisor on a monthly, quarterly or annually basis. The franchisor does not have liability and is not responsible for any activity in the franchisees business and does not have any employment liability, and are not responsible for any of the on job injuries in the franchisees business.

A franchise is a right granted to an individual or group to market a company 's goods or services within a certain territory or location. There are companies that fall up under the franchise umbrella such as McDonald’s, Subway, and Pizza Hut. Many people think of restaurants or fast food businesses when they think of franchise. There are over 120 different types of franchise that consist of automotive, health and fitness, financial services, and cleaning and maintenance, just to name a few. Scenario: A person is interested in starting a business and would like to own a Taco Bell. The best form to use is the franchise. This would require the owner to buy into the franchise.

Q1.1 IDENTIFY TYPES OF BUSINESS FRANCHISES AND DIFFERENTIATE KEY FACTORS. RESEARCH AND PROVIDE EXISTING OF EACH TYPE IN RELATION TO EXISTING FRANCHISE BUSINESS OPERATION. FRANCHISE TYPES MUST INCLUDE THE FOLLOWING:

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.

Opening a franchise brings a brand name and materials to a business to produce instant recognition and bring in brand loyal consumers. A franchise creates a business relationship with a franchisor to bring a brand name, trade dress, and trademark to a franchisee (Kubasek et al., 2015, p. 431). In turn for the franchise material and name, the franchisee pays a percentage of sales to the franchisor (Kubasek et al., 2015, p. 431). As reported in 2011, franchising was so popular that it was the genesis of one of every 12 retail businesses in the United States (Welsh, Desplaces, & Davis, 2011, p. 4). A weakness of owning a franchise was reported by Perrigot, Hussain, and Windsperger (2015) where “franchisees have to strictly follow operating manuals and almost all of the strategic decisions are made at the franchisor level” (p. 696). Although it does have a curtailed degree of freedom, a franchise brings greater stability with a proven business style and support system.

Franchising as it is generally known today is a form of marketing or distribution in which a parent company customarily grants an individual or a relatively small company the right, or privilege, to do business in a described manner over a certain period of time in a specified place. The parent company is termed the franchisor; the receiver of the privilege is called the franchisee;

A negative aspect of choosing to franchise one’s business is that there is a lesser degree of control. Although franchisees are generally given guidelines and rules about the “franchisor 's operating procedures, the units are owned by entrepreneurs and not the company. The franchisee is ultimately responsible for profits and losses, so he may decide to implement

In the business world there are many routes businesses can take to try to ensure a successful venture. There are sole proprietorships, partnerships, limited liability partnerships, corporations, limited liability corporations, S corporations, and then there is franchising. A formal definition of franchising is “a continuing relationship in which a franchisor provides a licensed privilege to the franchisee to do business and offers assistance in organizing, training, merchandising, marketing and managing in return for a monetary consideration” (Franchising, n.d.). In simpler terms, franchising is paying someone for their business, marketing, and operations strategy, as well as the use of their name (Obringer, n.d.). Discussed next are the important roles in franchising.

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.

Franchising is defined as a business model wherein the owner of the business (franchisor) gives the independent operator (franchisee) the right to distribute his product, apply his business techniques and use his brand and/or trademark in the conduct of the business. With such a business model, the business owner can maximize their business’ profit potential in a shorter time compared to other more traditional business models. In franchise business, it is not only the products or service that the franchisee can avail; it is more of the system-the business plan of the chosen franchise. It is fact that before franchise companies offer their business packages, they already conducted strenuous