Advantages

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Advantages

  1. 1. ADVANTAGES of the FRANCHISE
  2. 2. <ul><li>Established Product or Service </li></ul><ul><li>Technical and Management Assistance </li></ul><ul><li>Quality control standard </li></ul><ul><li>Less operating capital </li></ul><ul><li>Opportunities for growth </li></ul>
  3. 3. 1. ESTABLISHED PRODUCT OR SERVICE
  4. 5. <ul><li>KFC, Hyatt hotel, Sheraton hotel, Gloria Jean’s coffees, Pho 24 ... are consistent brand names in quality , design , taste, store… </li></ul>
  5. 6. <ul><li>Franchising fee for </li></ul><ul><ul><li>Domestic franchisee: $7,000 </li></ul></ul><ul><ul><li>Foreign franchisee: $12,000 </li></ul></ul><ul><li>3% annual revenue for Royalty & Advertising fee. </li></ul>
  6. 7. 2. TECHNICAL & MANAGEMENT ASSISTANCE
  7. 9. <ul><li>Pho 24 supports franchisee to get customer from the beginning stage to during and after Opening ceremony, easier to borrow money … </li></ul><ul><li>4 requirements to franchisee: Belief in business model ; Understand the local market ; Have the Management capability and Finance capability </li></ul><ul><li>Standards: Clean , Delicious , Attractive , Quality, Registered intellectual property right … </li></ul><ul><li>6 steps in making Pho: take the right amount of Pho, boil Pho, put Pho in bowl, put meat on it, spread Pho water, add spices , pepper . These 6 steps must be done for all Pho 24 system. </li></ul>
  8. 10. <ul><li>Each 4 to 5 hours, there is 1 more McDonald’s </li></ul><ul><li>Franchising fee 45.000.000 USD and 1,9% monthly revenue </li></ul><ul><li>McDonald’s University </li></ul>
  9. 11. <ul><li>Yogen Fruz has 1.000 stores in 32 countries </li></ul><ul><li>Franchising fee 30.000 - 40.000 USD/ year in 5 years </li></ul><ul><li>Franchisor will help Franchisee to design store. </li></ul><ul><li>If Franchisee can’t manage stores, Franchisor will provide managers. </li></ul>
  10. 12. 3. QUALITY CONTROL STANDARDS
  11. 13. <ul><li>Achieve constructive, positive results. </li></ul><ul><li>Receive a genuine service. </li></ul><ul><li>Learn what need to be successful </li></ul><ul><li> Ensure consistent image, return business, employee morale. </li></ul>
  12. 14. The curious case of KFC
  13. 15. <ul><li>KFC is based in Louisville, Kentucky, and is the world’s most popular chicken restaurant chain. </li></ul><ul><li>Founded by Colonel Harland Sanders in 1952. </li></ul><ul><li>More than 11,000 outlets. </li></ul><ul><li>85 countries and territories around the world. </li></ul><ul><li>8 million customers each day. </li></ul>
  14. 16. KFC Domestic & International
  15. 17. How KFC control quality standards? <ul><li>Service quality (50 points) </li></ul><ul><li>Product quality (30 points) </li></ul><ul><li>Cleanliness (20 points) </li></ul><ul><li>Product / process quality (44 points) </li></ul><ul><li>Facilities (16 points) </li></ul><ul><li>Sanitation / operations (15 points) </li></ul><ul><li>Etc (15points) </li></ul>
  16. 18.  A great benefit to franchisee.
  17. 19. 4. LESS OPERATING CAPITAL
  18. 20. <ul><li>Relevant quantity of inventory. </li></ul><ul><li>Reduce redundancy of stocking storage. </li></ul><ul><li>Receive financial assistance. </li></ul>
  19. 21. <ul><li>Receive business insurance and health insurance. </li></ul><ul><li>Higher profit from: </li></ul><ul><ul><li>Purchasing power </li></ul></ul><ul><ul><li>Proven operation </li></ul></ul><ul><ul><li>Quality standards </li></ul></ul><ul><ul><li>Lower inventory costs </li></ul></ul><ul><ul><li>Product or service improvements </li></ul></ul>
  20. 22. 5. OPPORTUNITIES FOR GROWTH
  21. 23. Master-Franchising Sub-Franchising Opportunities Have legal right to establish sub-franchises or licenses
  22. 24. Population of over 80 millions Developing infrastructure Growth rate of about 7% Number of firm increase considerably Vietnam joins WTO Potential Development In Franchise Follow by World Franchise Council (WFC), Vietnam has about 70 franchise systems in both domestic and foreign company such as Trung Nguyen coffee, Pho 24, Kinh Do Bakery, KFC.
  23. 25. <ul><li>Expansion </li></ul><ul><li>Motivation </li></ul><ul><li>Operation of Nonunion business </li></ul><ul><li>Bulk purchasing </li></ul><ul><li>Other advantages </li></ul>ADVANTAGES TO THE FRANCHISOR
  24. 26. 1. EXPANSION
  25. 27. Develop by own investment Franchising
  26. 28. <ul><li>Expand with limited capital, risk and equity investment. </li></ul><ul><li>Require few management personnel  Lower staff payroll and fewer staff problem  Effective monitoring and control of company operation. </li></ul><ul><li>Opportunities for franchisor to buy into the potential franchised company. </li></ul><ul><li>Avoid zoning ordinances, business regulation and licensing restrictions in the local community. </li></ul><ul><li>Simplify the management structure and reporting requirements associated with expansion. </li></ul><ul><li>More rapid expansion: penetrate and dominate a new market quickly. </li></ul>Why franchising???
  27. 29. 2. MOTIVATION
  28. 30. <ul><li>Franchisee unit is operated by an owner not a company-employed manager. </li></ul><ul><ul><li>Benefit from the owner’s motivation, self-direction, personal interest… </li></ul></ul><ul><li>Franchisee is a respected and influential member of the community. </li></ul><ul><ul><li> Have community’s support and assistance. </li></ul></ul><ul><ul><li> Each franchisee’s success will contribute to the whole franchise’s system. </li></ul></ul>
  29. 31. EXAMPLE <ul><li>Mike Scruggs is a successful franchisee of Little Caesars in Detroit, US. </li></ul><ul><li>Senior vice-president of Little Caesars Enterprises  Franchisee </li></ul><ul><li>He has opened 5 restaurants in 31 months. </li></ul>
  30. 32. <ul><li>Reason to choose franchise: &quot;You want to work for yourself, make decisions that don't involve a lot of red tape.“ </li></ul><ul><li>Passion: &quot;I've always been in operations, behind the counter, working in the stores with the managers and the people.&quot; </li></ul><ul><li>Working’s ethics: &quot;You retain people by how you train them, how you respect them, and how you support them. It's not always pay.&quot; </li></ul>
  31. 33. 3. OPERATION OF NONUNION BUSINESS
  32. 34. <ul><li>Not belonging to, </li></ul><ul><li>Not allowing affiliation with a Trade union. </li></ul>Nonunion???
  33. 35. <ul><li>A single franchised operating business is less likely to be unionized. </li></ul><ul><ul><li>No law penalizes business for not establishing Union. </li></ul></ul><ul><ul><li>Require at least a specific number of Union members for business to found Union. </li></ul></ul><ul><ul><li>… </li></ul></ul><ul><ul><li>http://www.vietlaw.gov.vn/LAWNET/docView.do?docid=6778&type=html </li></ul></ul>
  34. 36. <ul><ul><li>Cost less to operate a nonunion business. </li></ul></ul><ul><ul><li>Save in the amount of wages and benefits to be paid to employees. </li></ul></ul><ul><ul><li>Not reduce control over employees (no negotiations, strikes, etc). </li></ul></ul><ul><ul><li> Good for franchisors (as well as franchisees) </li></ul></ul>
  35. 37. 4. BULK PURCHASING
  36. 40. GROUP’S MEMBERS <ul><li>Hồ Ngọc Bích – BA060022 </li></ul><ul><li>Phạm Thanh Dũng – BA060024 </li></ul><ul><li>Hoàng Lê Minh – BA060031 </li></ul><ul><li>Nguyễn Xuân Thành – BA060039 </li></ul><ul><li>Lê Thị Thuỳ Trang – BA060111 </li></ul>

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