This document compares and contrasts franchising and multi-level marketing (MLM). Franchising involves a franchisor licensing their business model, brand and systems to franchisees for an initial fee and ongoing royalties. MLM involves independent distributors recruiting other distributors to build a sales network, with commissions paid on downstream sales. While both allow for business expansion, franchising has higher start-up costs while MLM emphasizes recruiting over direct sales.

1. Trade Operations
Franchising vs MLM
*Paulina Rura *Yılmaz Yamaç *Serhat Bayrak *Mehmet Çilaka * Furkan Kılıç

2.  Introduction
 What is Franchising?
 What is MLM?
 Conslusion

3. Introduction
 Marketing is the process of communicating the
value of a product or service to customers, for the
purpose of selling that product or service.
 Marketing is the link between a society’s material
requirements and its economic patterns of
response.
 Long term relationships

4. Types of Marketing
Aggressiveness strategy Ambush marketing Article marketing
Brand language Call to action (marketing)
Cause marketing
Cross-media marketing
Customerization Direct marketing
Franchising Global marketing Guerrilla marketing
Limited edition candy
Loyalty marketing Mega marketing
Multi-domestic strategy Multi-level marketing Personalization
Scenario planning Share of voice Special edition
Strategy dynamics Student marketing Undercover marketing

5. What is Franchising?
 Franchising is a strategie, a company may use in
capturing market share.
 Creating an image in the minds of customers
 A brand identification
 A successful method of doing business
 A proven marketing and distribution system

6. History of Franchising
 The first signs of franchising can be traced back to
feudal England
 After the II. World War franchising grew rapidly
 Today, Franchising industry which now has nearly
1,000 brands in a multitude of different sectors.

7. Franchisor’s point of view
Advantages
 Financial
 Reduced operating, distribution and advertising costs.
 Operational
 Enhanced productivity levels & better quality
 Strategic
 Faster network expansion & better opportunity to focus
on changing market needs
 Administrative

8. Disadvantages
 Requiring to have the appropriate resources to
recruit, train, and support franchisees.
 Broader risk
 New policies and procedures
 Disclosing confidential information
Franchisor’s point of view

9. Advantages
 “Turn-key” factor
 Successful operational track record?
 Latest developments & changes
 Trade name/ Trademark
 Systems display
Franchisee’s point of view

10. Advantages
 Franchise fees & royalty
 The transfer of all goods
 The necessity of biding
 Reduced corporate profit
Franchisee’s point of view

11. Examples of Franchising (2014)
RANK FRANCHISE NAME
1 Anytime Fitness
2 Hampton Hotels
3 Subway
4 Supercuts
5 Jimmy John’s Gourmet Sandwiches
6 7-Eleven Inc.
7 Servpro
8 Denny’s Inc.
9 Pizza Hut Inc.
10 Dumkin’ Donuts

12.  Direct selling method in which independent-agents
serve as distributors of goods and services, and
are encouraged to build and manage their own
sales force by recruiting and training other
independent agents.
What is Multi-level Marketing?

13. o Retailing
o Direct Sales
o Uni Level Marketing
o Mail Order
o Binary
Types of Multi-level Marketing

14.  As a first example: Nurtralite
 Pyramid Selling Scheme
 Legislation difficulty
Origins of Multilevel Marketing

15. Origins of Multilevel Marketing
Name Revenue Country
Alticor (Amway) $11.3B USA
Avon Products, Inc. $10.7B USA
Herbalife Ltd. $4.1B USA
Vorwerk Co. KG $3.3B Germany
Natura Cosmeticos
SA
$3.2B Brazil
Mary Kay Inc. $3.1B USA
Tupperware Brands
Corp.
$2.6B USA
Nu Skin Enterprises,
Inc.
$2.2B USA
Oriflame Cosmetics
SA
$2.0B Luxembourg

16. Differences between Franchising
and Multilevel marketing
 Start up cost
 Expansion of business
 The Income growth
 The working timing
 Reach a customer beyond

17. Conclusion
 Growth factor
 It take a huge money
 The limitations
 Expansion of business
 Introducing