The document discusses the key differences between franchising and licensing business models. Franchising involves selling rights to a business name and model to independent franchisees, and provides them with support, training, and territorial rights. Licensing involves permitting another company to manufacture a product for a fee, without providing support or control. Examples given are McDonalds and Microsoft Office for franchising and licensing respectively. The document also lists advantages and disadvantages of direct exporting, franchising, and licensing business arrangements.
Franchising
A marketing system revolving around a two-party agreement, whereby the franchisee conducts business according to the terms specified by the franchisor
Franchisee
An entrepreneur whose power is limited by a contractual agreement with a franchisor
Franchisor
The party in the franchise contract that specifies the methods to be followed and the terms to be met by the other party
Franchisor Controls on Franchisees
Restricting of sales territory
Requiring site approval and imposing requirement on the outlet’s appearance
Restricting the goods/ services that can be sold
Requiring specific operating hours
Controlling advertising
Contact:Franchisemart
ring Road,21st century
surat-395004
No-09909960054
In this presentation, we will discuss about the importance and merits for giving franchise and becoming franchise, the various drawbacks of owning and giving franchise, and the different benefits obtained from franchisees,
To know more about Welingkar School’s Distance Learning Program and courses offered, visit: http://www.welingkaronline.org/distance-learning/online-mba.html
Franchising
A marketing system revolving around a two-party agreement, whereby the franchisee conducts business according to the terms specified by the franchisor
Franchisee
An entrepreneur whose power is limited by a contractual agreement with a franchisor
Franchisor
The party in the franchise contract that specifies the methods to be followed and the terms to be met by the other party
Franchisor Controls on Franchisees
Restricting of sales territory
Requiring site approval and imposing requirement on the outlet’s appearance
Restricting the goods/ services that can be sold
Requiring specific operating hours
Controlling advertising
Contact:Franchisemart
ring Road,21st century
surat-395004
No-09909960054
In this presentation, we will discuss about the importance and merits for giving franchise and becoming franchise, the various drawbacks of owning and giving franchise, and the different benefits obtained from franchisees,
To know more about Welingkar School’s Distance Learning Program and courses offered, visit: http://www.welingkaronline.org/distance-learning/online-mba.html
The powerpoint presentation aims to give a simple yet detailed description of how the franchise model of business works. What are the things to look out for or consider while starting a franchise business and which franchises have been relatively successful.
The powerpoint presentation aims to give a simple yet detailed description of how the franchise model of business works. What are the things to look out for or consider while starting a franchise business and which franchises have been relatively successful.
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2. Difference between Licensing Franchising
Franchising: A franchise business is a business in which the owners, or
"franchisors", sell the rights to their business logo, name, and model to third party
retail outlets, owned by independent, third party operators, called "franchisees"
Licensing: A business arrangement in which one company gives
another company permission to manufacture its product for a specified payment .
Franchising Licensing
Governed by: Securities law Contract law
Registration: Required not required
Territorial Rights: Offered to franchisee Not. Offered; licensee can sell
similar licenses and product in
same area
Support and training: provided by franchiser Not provided
Royalty payments: yes yes
Use of trademarked Logo and trademarked retained by
franchiser
Can be licensed.
Examples: McDonalds, Subway, Dunkin
Donuts
Microsoft Office
control: Franchiser exercise control have licensor does not control have over
licensee
3.
4. ADVANTAGES & DISADVANTAGES OF DIRECT
EXPORTING
ADVANTAGES DISADVANTAGES
Customer relations High investment
Direct control High risk
Profits High overheads
Incentives & risk Vast knowledge
No dependent on middleman Unstable for small manufactures
5. Advantages and Disadvantages franchising
• Advantages
• The brand is already established .
• The business model has a proven track record .
• Training Programs .
• Ongoing Support .
• Marketing assistance.
• Disadvantages
• High startup costs .
• Profits aren’t guaranteed.
• Limited independence .
• Conflict of interest .
