...on the management to generate enough returns for the stakeholders to justify their stakes in the business. The executive president (Business Development), in person of Dan Hannah recommend the idea of establishing presence across the frontiers by selecting some prime target countries via new franchises, the countries that attracted the management interest are Canada, Japan, Belgium, and the United kingdom as their capita beef consumption, populations, urbanization rates and affinity with USA are in agreement with management corporate strategy. The company has economies of scale like technical know –how, support mechanism , expertise in the business of steaks being deployed towards the franchise management , the probability of the franchise and the expansion decisions going down the drain is almost nil. Key Assumptions: The management is looking forward to revenue and company through establishing presence in the national and international market as the most strategic steps to undertake. Criterions: The most important for chosen a country is the revenue growth, volume of beef consumption and strict usage of USA produced prime beef. The other contending issues with location of franchise is in the area of quality well to -do population figures that can drive the business and their must not be any...
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...Mauricio Barajas Jaimes ID: 000208124 March 8, 2015 INVESTIGATION ON FRANCHISES PRODUCT FRANCHISE: HUSSE http://www.franchise.com/franchise/pet-animal/mobile/husse-arizona/company-information.cfm Characteristics: local pet food Delivery Company with the same benefits as a global company. Headquartered in Stockholm, Husse is the European leader in the home delivery of dog, cat and horse products under the Husse brand. How does the brand work? * You work from home and decide for yourself how you spend your time. * Deliver premium and super premium products directly to the customer’s door. * Generate new customers through local farmers markets, door to door, dog / cat or horse shows, ewspapers, flyers, visiting breeders, social media, sponsor events or other activities. * Administrate your orders and customers via a customized intranet system. Total Investment Range: $11,250 - $25,000 dollars Initial Fee: The franchise fees start as low as $11,250 Area Coverage: Today more than 750 franchisees and distributors operate a Husse business in more than 45 countries.Take advantage of Husse's efficiency, low costs and minimal administration. Requirements from the Franchise: The requirements for getting started are: Invest in the franchise license, Invest in a red car according to our guidelines, Complete the initial training. (2 full days) and that most franchisees store their stock in a spare room or climate controlled basement/garage. An...
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...Joan Holtz 1. Electric Utility Bills Revenue of the Electric Company can be measured given the amount of electricity generated for the year multiplied by the per-kilowatt/hour charge to customers. This is because the electric service has already been provided and distributed to customers for ready consumption 2. Retainer Fee The amount of revenue to be counted in 2010 is $5,000 from the $10,000 retainer fee good for 1 year. This is because, despite the fact that there was no way of knowing how often, or when, the client would request advice, the fee is paying for the certainty of the law firm’s availability and expertise at any point where these are needed by the client. The delivery of this “service” lapses each month in proportion to the total amount of paid fees hence $5,000 should be recognized by the end of 2010. 3. Cruise The amount of revenues that Raymond’s Travel Agency should record in 2010 is $260,000. The service that the travel agency provides is in the act of booking related travel services – accommodations, transportation, coordination in behalf of clients, etc – as opposed to delivering these same services per se. Since Raymond’s completed the above while still within 2010, revenues should already be recognized. 2011 refunds would not have an impact on revenue recognition as this should already represent a loss to Raymond’s, though certain stipulations in the company’s reservation policy should eliminate such possibilities or aid in...
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...the case: McDonald's gave Dayan an exclusive franchise to operate McDonald’s restaurants in Paris, France. McDonald’s required Dayan adhere to all quality, service, and cleanliness standards set by McDonald’s, Dayan agreed. The parties made an agreement which stated the reason for Dayan must maintaining QSC standards was that a “departure of restaurants anywhere in the world from these standards impedes the successful operation of restaurants throughout the world, and injures the value of [McDonald’s] patents, trademarks, trade name, and property.” Dayan promised he would not in violation of the standards unless he got prior written permission from McDonald’s. But McDonald’s found Dayan violated these standards for several years, so it wanted to terminate the franchise. Then Dayan filed a lawsuit to enjoin the termination. Identifying the client’s problem： McDonald’s rendered Dayan an exclusive franchise, and required Dayan comply with QSC standards; Dayan agreed. McDonald’s found Dayan in violation of these regulations, and sought to terminate the franchise; Dayan filed a lawsuit, wanted to enjoin the termination and one of the justifications was that McDonald’s was obligated to provide him with the operational assistance necessary to enable him to meet the QSC standards, but it did not. What things McDonald’s should do in order to avoid such kind of cases. Four alternative courses of action： 1 background check for franchise owners; 2 set McDonald’s flagship store, organize...
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...Entry Strategy Australia has nearly 1,200 franchise systems, with more franchising outlets per capita than the United States, and has been referred to as the “Franchising Capital of the World”. For many Australians, owning and operating their own business is a lifelong dream, and franchising is a relatively low-risk way to achieve this goal. This form of business is fast-growing, and more than 400,000 Australians are employed as a result of franchising (Vucic). Since 2010, franchising has grown by 15%, which can be attributed to the enactment of specific and compulsory legislation that governs franchise relationships (Baybridge). There are different forms of foreign franchising in this Australia; however, we believe direct franchising is the best option because it provides ultimate control of the franchise network as the two parties involved will have a direct relationship. It also allows for the direct supply of products or allowances made to source own supply. Cultural barriers will have to be worked out to provide adequate training and a third party advisor can help with local customs and commercial practices (Baybridge). Australia has many channels of support for this form of business as more and more companies emerge that aide in franchisee training, franchise system development, public relations and marketing (Vusic). The Franchise Council of Australia provides key aspects of franchise decision making, management, and practices from experts in their field (FCA). ...
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...necessary to obtain a Freshii franchise? Restaurant experience is always helpful but, if you have experience running another type of business including working with employees and customers, managing cash and generating financial statements, we have a complete training program and manuals as well as field operational staff that can help you learn this business as well as provide ongoing support for you. Is there a cost for the training program or ongoing support? The cost of Freshii University is included in your franchise fee, including training and support at your location for the Grand Opening. Travel, lodging, and food, are the responsibility of the individual franchisee. On going field support after opening can be provided at a per diem cost. How much does a franchise cost? The cost of a franchise is $30,000, payable upon signing of the Franchise Agreement. Am I protected from other Freshii stores opening near my store? At the time a location is determined for your first store a “Protected Area” will be established. The size of the area will depend on the density of population, traffic, competition and other factors. Can I reserve territories for future development after my first store? Yes. At the time of signing of the Franchise Agreement you can also sign a Development Agreement defining the number of stores and area(s) you plan to open those stores. Each additional store reserved under a Development Agreement requires a franchise fee of $30,000, including a payment...
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...venue for litigation and in the event of litigation a decision needs to be made where the venue will be. Tracey has always been interested in opening a Papa Johns since she was the General Manager ten years ago. After moving back to Baltimore, Maryland she had enough saved to begin the process of purchasing a Papa Johns’ franchise. “Because franchisors are usually larger than franchisees and have more resources, they often have the upper hand in franchise relationships. However, federal and state laws have been established to protect the franchisee. Thus, contract law, and the Uniform Commercial Code in particular apply. If the terms of the contact are not met, either side can sue for breach of contract” ((Kubasek, Browne, Herron, Giampetro-Meyer, Barkacs, Dhooge, & Wiliamson, 2012, p. 785). There are several advantages to owning a franchise. The most important advantage of owning a Papa John’s franchise is the low failure rate. Because Papa Johns was established in 1985, they have a long success rate. Another advantage in owning a franchise is the help with the start up. “When you buy a franchise, you get all the equipment, supplies, and instruction or training needed to start the business. You may also receive ongoing training and help with management and...
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...About Mr. Empanada “Mr. Empanada Inc. is a family owned, rapidly growing, small business that currently has one company owned location and six franchised locations. Their company owned manufacturing facility produces all the empanadas and other pre-prepared food items to be sold to the franchisees, thus assuring quality and consistency throughout the system. Additionally, they own Mr. Empanada Franchise Corp., which is responsible for selling, training and coordinating new and potential franchise locations.” The two industries that Mr. Empanada operates in are the fast casual industry and the franchise industry. “Fast casual restaurants feature limited service or self-service, average checks between $8 and $15, made-to-order food, and upscale décor.” A franchise happens when there is an agreement between the franchisor and the franchisee, which allows the franchisee to do certain activities. For instance the franchisee can sell/market the franchisor’s product. Legal/Political Environment There are many external factors that impacts a business. The one that I’m going to focus on is the legal/political environment. This comprises of laws, regulations, and policies that are put into place to control business activities. The legal/political (government/legal barriers) environment is one of the factors that helps determine the strength of one of Porter’s five forces, threats of new entrants, so it will be discussed below. Threats of New Entrants Porter’s five forces is basically...
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...Background and Benefits Sonic boasts one of the lowest turnover ratios in quick-service restaurant franchises. Customers can park under a shady canopy and order food through the curbside speakers. A friendly Carhop delivers orders out to the car where patrons can eat it or take it home. The concept cuts down on busy drive through lines and presents a unique eating experience to customers. A standard store layout with 24 to 36 stalls requires approximately ¾ of an acre for build out. Sonic Food is made-to-order with unique menu items not offered at other Quick Service Restaurant's. Sonic maintains strong sales growth, with remarkable customer frequency statistics and continued high returns for stockholders. The franchise fee is $45,000 with a total investment for a traditional SONIC ranging from $1.1MM to $3.3MM. SONIC is Small Business Administration (SBA) approved. The term of a traditional SONIC franchise is 20 years, plus a 10 year renewal. Non-traditional franchises start with a 10-year term, a 5-year renewal, and a $22,500 franchise fee. The total initial investment ranges from $434,000 to $545,000, excluding land costs. Other non-traditional locations start with a manageable investment of $107,000 to $221,000. In addition, you must have prior or current successful restaurant experience and/or strong entrepreneurial skills. Sonic offers a 12-week training program that includes eight weeks of restaurant training, three weeks at new store openings and one week of classroom...
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...preparing to purchase a Beano's Ice Cream franchise. Because his personal assets were limited, Smith needed a partner who could finance the purchase. After Smith found a prospective partner, Barney Harris, they negotiated a purchase price with Beano's. Then, Harris gave Smith a partnership proposal. As the case opens, Smith is evaluating the partnership proposal. His three choices are: to accept Harris's partnership proposal, to make a counter proposal, or to try to find a new partner. Two months ago, Terry Smith had been so confident that he would soon own his own Beano's Ice Cream franchise, that he had put an "I LOVE BEANO'S ICE CREAM" bumper sticker on his Honda. As he looked at it now, he noticed how faded it had become in such a short time. He wondered if in fact it had been a short time—or a lifetime. Until recently, Smith had rarely second-guessed himself. After carefully researching an issue, he would base his decision on the facts and then proceed—without looking back. Now, however, he knew he had to put all of the momentum from the past six months to one side. He had to forget about the months spent investigating franchises, selecting Beano's, writing his business plan, and looking for financing. He had to forget about the fact that he had found only one prospective partner who could finance the deal—Barney Harris—and that he and his partner had spent several more months negotiating to purchase the franchise. He had to push away his own emotional investment...
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...Anytime Fitness continues to “maintain robust growth rates as the world’s largest and fastest growing 24-hour co-ed fitness franchise since their founding in 2002” (Anytime Fitness, 2012). Whenever looking to enter a franchise agreement, startup costs become a vital point. Anytime Fitness’s website provides numerical figures for average startup costs for both a complete fitness center and a fitness express center which doesn’t have as much square feet or perks as a regular center; fitness center is between “$59,999 and $321,899 and an express center is between $46,299 to $210,999” (2012). Not only does Anytime Fitness offer affordable startup costs but an “online operations manual” is available once the agreement is entered. Having access to an online manual allows for a franchisee to take the lead and put in the effort necessary to create a successful franchise. In addition to online manual, Anytime Fitness also holds conference calls and webinars throughout the month to make sure everyone is up to par for their region and all franchises are operating properly. Perhaps the most intense feature and reason Anytime Fitness flourishes is the security and surveillance system in place. Because the security is so extensive it allows for members to come and go at their leisure. Having access 24 hours a day allows members to work with their schedule instead of plan the gym workout around their schedule. Another plus to having cameras and exclusive access by card only is the low...
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...he worked in and invested them, with his wife, in a car repair franchise in a suburb in Indianapolis. He has been expanding since and seven years later he holds five franchised locations around Indianapolis. Revenues from the first two car repair shops financed his last two businesses. He currently has twenty-seven full time employees, yet feels the stress from running the shops for ten-hour work days and evenings full of paperwork. It seems Fred is working more now that he is semiretired than before as a senior executive. Fred is not going thru this by himself since this situation happens often with franchisees and the misconception of being their own boss and their own company. They believe that others will take care of all the headaches and exposure of the business, yet the franchisor is the one making the money in royalties and advertisement while dictating how the business must look and even be ran. If Fred does not comply then the franchisor can take the franchise away at any moment and Fred would be left with nothing. Assess Fred’s capability and capacity to be a franchisee in general and for this specific company. Seems to me that Fred definitely has the capability and capacity to be running a franchise of car shops. This is due to his thirty-year experience in the automobile industry. He has the knowledge and understands what it takes to run a car shop, even though his knowledge of a franchise might not be as extensive. Fred can certainly put his...
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...CASE STUDY OF KRISPY KREME Just like their Donoughts the Krispy Kreme stock seemed irresistible when they went public in 2000. It was even named as IPO of the year and the Forbes named it as the company to look out for. But now it is just a firm with a market capitalization over 300 million. So what did Krispy Kreme did wrong to be in a situation like this. The decline of Krispy Kreme Donoughts Inc. with a market capitalization of over 3 billion to just over 300 million was due to the use of synthetic leases, repurchased franchises, disappointing joint venture results and due to the problems of earnings management. This paper argues that there were numerous warning signals in the doughnut franchisor’s accounting and managerial decisions that investors refused to take seriously as they bid the stock from its IPO price of $6 to its eventual peak of $50 on NYSE. There are lots of lessons that can be learned from this autopsy of the Krispy Kreme and might well make investors and auditors more wary about jumping on the next IPO bandwagon. They bought out a struggling Michigan franchisee and agreed to raise the purchase price from $26 million to $32 million so that the franchisee could afford to close two stores and to settle its overdue debts owed to Krispy Kreme, thus avoiding a bad debt loss. Why would so many large franchisees of a supposedly-successful chain want to get out of their investment when operations seemed to be going so well? As we see in the exhibit...
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...to others and the community. Question 2 The pitfall that Caffeine would endear if exercising too much control is product liability and may be held liable under the doctrine respondeat superior for the acts of the franchisees’ employees. Too much control would be telling the franchisee where the business should be located and to hire, or how to run the day-to-day operations. Day-to-day operations are usually left up to the franchisee to decide, unless otherwise specified in the contract. Generally, the franchisor will provide some supervision and control to protect the name and reputation, such as food and products being the same. Caffeine is a chain-style business operation. This is important because under this business style franchises are...
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...Changes in Business Process 15 Changes in Business Roles 16 Rationale for Changes 16 Changes in Organizational Structure 16 Changes in Business Partner Relationships 17 Setting Core Business Priorities 17 IT Engagement Model Recommendations 18 Companywide IT Governance 18 New Core Business Opportunities 21 Outsourcing Opportunities - Recommendations 21 Size and Scale Considerations 22 Growing the Organization - Recommendations 25 Summary of Enterprise Architecture Proposal for Ralph’s Ribs 29 References 31 Executive Summary In the restaurant business there are between five and seven different BBQ franchise restaurants available depending on the state you want to operate in. Ralph’s needs to have a solid foundation and a firm strategic plan to remain competitive against the other franchise options available so when someone wants to open a new franchise there is no question they would go with Ralph’s Rockin’ Ribs. An Enterprise Architecture will provide Ralph’s Ribs with the roadmap to follow and will...
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