Retail Management

1. Franchising in retailing
• successful method of national / international retail expansion.
• Def- continuing relationship in which franchisor provides
licensed privilege to do the business + assistance in
organizing, training, merchandising, and management in
return for a consideration from the franchisee.
• Roles of franchisor and franchisee.
Function Franchisor franchisee
Site selection Oversees Chooses with approval
Design Provides design Incurs cost
Employees Training Hires, supervises, pays
Products to b Decides Can change if prior
sold approval
Prices Sets/recommends Follows
Ad /promotion Decides nationally May suggest local needs

2. • Evolution- powers to peasant. singer machines and now in
1950 by Raycrok -MacDonald.
• Types- 1-product/trade-name to acquire mfr’s identity to some
extent, 2-busines format franchising. License for predetermined
financial returns thru complete business package including
training ,support of corporate name e.g. restaurants
• May b single unit, or master franchise-for region/country who
then sets up unit franchise,
• Advantages- 1-low risk, 2-growth,3-ease of financing and
operational supports, 4- reduced ad costs, Disadvantages-1-
royalty fees,2- lack of control
• Issues- being a contractual relationship so legal matters.
Intellectual property rights on patented products, trade mark or
trade names copyrights, consumer conflicts as consumer
protection acts, weights and measure acts for packaged
commodities, laws related to real estate investments
• Changing consumer lifestyles demands and people can achieve
their entrepreneurial dreams. Great way to make it expand
even as a national brands.
• Critical success factors like franchisee economics, aggressive
unit growth