Franchises

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Notes on Franchises

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Franchises

  1. 1. Do you recognize any of these?
  2. 2. How about these?
  3. 3. Local Franchise Operations
  4. 4. The Definition of a Franchise• A business that uses the name, logo and trading systems of an existing successful business
  5. 5. Characteristics of a Franchise• It is formed when a successful idea is sold or rented to other people known as franchisees.• It is an already existing business idea.• Franchises normally operate in many different countries and are usually large in number.• An initial fee and regular royalties are paid to the franchisor.• The franchise is identical to the original company.
  6. 6. Benefits of a Franchise Operation• There is a brand name appeal for the product or service being sold.• The franchisee receives assistance from the franchisor in terms of advice and training.• There is normally centralized buying so all the Franchisees benefit from the discounts associated with buying in bulk• The franchisee benefits from the franchisors marketing which boosts his sales and revenue.
  7. 7. Drawbacks of a Franchise Operation• There is normally a requirement to follow standardized operations.• The line of products is restricted.• The franchisee has to pay royalties (fees) to the franchisor.• A franchisee may suffer from the negative activities of other franchisees or the franchisor

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