What is franchising?
Franchising is an established business expansion strategy that has proven to deliver rapid growth – with arguably reduced risk. Some stellar examples include MacDonald’s, Singer and Coca Cola. 1992 ETYRES; 1994 CHIPSAWAY; 1997 Mail Boxes Etc; 2009 ORANGE.
What are the three factors that make franchising appropriate?
three factors make franchising appropriate 1)Valuable system to sell -- the business is based on a proven system 2)Transferable concept -- the system can be reduced to a set of operating rules that can be codified
What does it take to be a successful franchisee?
To be successful in franchising you must understand the business and legal ramifications of your relationship with the franchisor and all the franchisees. Your focus must be on working with other franchisees and company managers to market the brand, and fully use the operating system to get and keep customers.
Is franchising a good business opportunity?
While franchising is an efficient tool for businesses, it’s also a lucrative business opportunity for aspiring and seasoned entrepreneurs. Franchising provides people the opportunity to run their own business with the support and guidance of a larger company with a proven model.
How does franchising work?
Franchising works well in settings where negotiating with customers is important to sales. For example, equipment rental and tuxedo rental. The level of standardization and codification of the process of creating and delivering the product or service is high. Easy to specify behavior in a contract.
Why is franchising important?
Franchising allows fast growth, which provides the economies of scale needed to cheaply build a brand. For example, Wendy's. The operation is labor intensive. Franchisees are less likely to "shirk" than company-employed managers. For example, maid services. Outlets are not terribly costly or risky to establish.
What is franchising fee?
Franchising is a method of doing business wherein a franchisor licenses trademarks and tried and proven methods of doing business to a franchisee in exchange for a payment ("franchise fee"), and usually a percentage of gross sales or profits ("royalty").
Does subway have a franchise agreement?
a new franchise agreement that allows Subway to redirect franchisee advertising dollars away from the Subway Franchisee Advertising Fund Trust, which is governed by a board of elected franchisees, to a separate entity created by Subway.
What is a franchising strategy?
Franchising is a business strategy for getting and keeping customers. It is a marketing system for creating an image in the minds of current and future customers about how the company's products and services can help them. It is a method for distributing products and services that satisfy customer needs.
What does it mean to be a franchisee?
As a franchisee you own the assets of your company, which you have chosen to invest in someone else's brand and operating system and ongoing support. You own the assets of your company, but you are licensed to operate someone else's business system.
What is a franchising network?
Franchising is a network of interdependent business relationships that allows a number of people to share: 1 A brand identification 2 A successful method of doing business 3 A proven marketing and distribution system
What is a network of interdependent business relationships that allows a number of people to share?
Franchising is a network of interdependent business relationships that allows a number of people to share:
What happens if you buy a franchise?
If you think you "bought" a franchise, you become an "owner" and begin to think and act like an owner. You will want to change the system because of your needs, you will wonder what you are paying the royalty for, and you will begin thinking of other franchisees as your competitors.
What is business relationship?
The business relationship is a joint commitment by all franchisees to get and keep customers. Legally you are bound to get and keep them using the prescribed marketing and operating systems of the franchisor.
What is franchising strategy?
Franchising - a strategy for growth. Entrepreneurs who are looking at innovative growth strategies may consider the possibility of “franchising” their business. The following outlines some of the issues and decision points associated with embarking on such a strategy. The list is not exhaustive and is not a substitute for professional advice, ...
What is franchising?
Franchising is an established business expansion strategy that has proven to deliver rapid growth – with arguably reduced risk. Some stellar examples include MacDonald’s, Singer and Coca Cola.
What does a franchisee receive in return?
In return, the franchisees would typically receive: national and/or regional marketing support (including possibly leads and opportunities) Depending on the type of franchise, the arrangement may also include provision of product, raw materials or supplies. Franchising is not appropriate for all types of company.
What is the core of a successful franchise operation?
Brand: The core of a successful franchise operation is the brand . Franchisors must have a brand that people wish to buy and be associated with. The brand should be recognisable, respected and appropriate for use across different geographic territories. There should be a strategy for continued investment in the brand.
What is a compelling sales proposition?
A Compelling Sales Proposition: A company should have a clear sales proposition that is understood and easily communicated. Whether it be based on price, quality, service, availability or whatever - the proposition must be able to be consistently deliverable.
What is a personal based business?
a “personality based” business that relies on customer loyalty to the individual and not the brand
What is a business process?
Business Processes: A business that has developed quality, consistent and documented processes for creating or delivering its products and /or services.