Pros and Cons of Business Models  By Val A. Slastnikov, Business Models Expert © 2010 Digitizer Group. All rights reserved
PART SEVEN (Pros and Cons Of Franchising Model)
What is Franchising? <ul><li>Franchising   is a method of doing business wherein a &quot;franchisor&quot; authorizes prove...
Who belongs in this category? <ul><li>Any type of a Franchise Owner (“franchisee”) if you are not a Franchisor </li></ul>D...
“ Franchising”   Pros  Franchise Leverage: Yes Franchisor’s Model Franchisor’s Success Franchisor’s Training
“ Franchising”  Cons Franchise  Control: No Customer Base: Limited Startup Costs: High Carrying Costs: High Scale- ability...
Level of Effectiveness <ul><li>Pros:  1 </li></ul><ul><li>Cons:  9 </li></ul>Level of Effectiveness = 10% Franchise Levera...
Analysis  <ul><li>Franchising Facts: </li></ul><ul><li>Franchise is a legal and commercial relationship between the owner ...
Analysis   <ul><li>Advantages of Franchising: </li></ul><ul><li>Established Brand and Customer Base </li></ul><ul><li>Mark...
Analysis  <ul><li>Disadvantages of Franchising: </li></ul><ul><li>Initial Payout  </li></ul><ul><li>Royalty Payments  </li...
Quote <ul><li>“ Why would anybody go out and spend $50,000 on a franchise to makes  whatever  when you can just start a bu...
Takeaways <ul><li>“ If you are a real entrepreneur – then franchising may not be for you. Real Entrepreneurs don’t own fra...
Where do you go from here?
<ul><li>CLICK HERE TO GO TO </li></ul><ul><li>PART EIGHT </li></ul>
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Part Seven - Pros And Cons Of Franchising Model

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Do you know what model to choose in your Life and Business?

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Part Seven - Pros And Cons Of Franchising Model

  1. 1. Pros and Cons of Business Models By Val A. Slastnikov, Business Models Expert © 2010 Digitizer Group. All rights reserved
  2. 2. PART SEVEN (Pros and Cons Of Franchising Model)
  3. 3. What is Franchising? <ul><li>Franchising is a method of doing business wherein a &quot;franchisor&quot; authorizes proven methods of doing business to a &quot;franchisee&quot; for a fee and a percentage of sales or profits. </li></ul>Is Franchising for you?
  4. 4. Who belongs in this category? <ul><li>Any type of a Franchise Owner (“franchisee”) if you are not a Franchisor </li></ul>Do you have what it takes to be a Franchise Owner?
  5. 5. “ Franchising” Pros Franchise Leverage: Yes Franchisor’s Model Franchisor’s Success Franchisor’s Training
  6. 6. “ Franchising” Cons Franchise Control: No Customer Base: Limited Startup Costs: High Carrying Costs: High Scale- ability: No Growth Potential: Limited Replic- ability: No Multiple Income Streams: No Profit- ability: Limited
  7. 7. Level of Effectiveness <ul><li>Pros: 1 </li></ul><ul><li>Cons: 9 </li></ul>Level of Effectiveness = 10% Franchise Leverage: Yes Franchisor’s Model Franchisor’s Success Franchisor’s Training Franchise Control: No Customer Base: Limited Startup Costs: High Carrying Costs: High Scale- ability: No Growth Potential: Limited Replic- ability: No Multiple Income Streams: No Profit- ability: Limited
  8. 8. Analysis <ul><li>Franchising Facts: </li></ul><ul><li>Franchise is a legal and commercial relationship between the owner of a trademark, service mark, brand name, or advertising symbol (the franchisor) and an individual or organization (the franchisee) wishing to use that identification in a business. </li></ul><ul><li>The franchise governs the method of conducting business between the two parties. </li></ul><ul><li>Generally, a franchisee sells goods or services supplied by the franchisor or that meet the franchisor's quality standards. </li></ul>
  9. 9. Analysis <ul><li>Advantages of Franchising: </li></ul><ul><li>Established Brand and Customer Base </li></ul><ul><li>Marketing Support </li></ul><ul><li>Business Support </li></ul><ul><li>Training Support </li></ul><ul><li>Access to Proprietary Methods </li></ul><ul><li>Reduced Risk </li></ul>
  10. 10. Analysis <ul><li>Disadvantages of Franchising: </li></ul><ul><li>Initial Payout </li></ul><ul><li>Royalty Payments </li></ul><ul><li>Marketing/Advertising Fees </li></ul><ul><li>Limited Creativity/Flexibility </li></ul><ul><li>Sole Sourcing </li></ul><ul><li>Long-Term Contract </li></ul><ul><li>Dependent on Franchisor Success and Reputation </li></ul><ul><li>False Expectations </li></ul>
  11. 11. Quote <ul><li>“ Why would anybody go out and spend $50,000 on a franchise to makes whatever when you can just start a business with no capital out of pocket and way more scalable ?” </li></ul><ul><li>– Brad Fallon, a Co-founder of StomperNet </li></ul>
  12. 12. Takeaways <ul><li>“ If you are a real entrepreneur – then franchising may not be for you. Real Entrepreneurs don’t own franchises – they choose their own path to success. </li></ul><ul><li>All franchises are “screening out” entrepreneurs because they don’t want them to mess with existing model.” – Rich Schefren </li></ul>
  13. 13. Where do you go from here?
  14. 14. <ul><li>CLICK HERE TO GO TO </li></ul><ul><li>PART EIGHT </li></ul>
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