Premium Essay

Franchising

In: Business and Management

Submitted By Jessaaang24
Words 339
Pages 2
Chapter II
Discussions

Franchising is a long-term cooperative relationship between two entities—a franchisor (owner) and one or more franchisees (dealer)—that is based on a franchise agreement in which the franchisor provides a licensed privilege to the franchisee to do business. The franchisor grants the franchisee the right to use a developed concept, including trademarks and immediate brand names, well-established tried and tested production, services and marketing methods and the entire business operation model (standard building design and décor, detailed techniques in running and promoting the business, training of employees, and (6) on-going help in promoting and upgrading of the products), for a fee.
Successful entrepreneurs often wonder if they should go into a franchising for business expansion. Like any business model, franchising has its benefits and drawbacks. You’ll not know if franchising is right for you until you evaluate its pros and cons. You’ll need a franchisor attorney or consultant to do that but before talking to the experts you should get a sense of the key advantages and disadvantages.

There are 3 common benefits you can get if you’ll engage in franchising:
1. Association with a well-established brand, reputation and services
With a one-shot payment of initial fee, you can have ready-immediate-wide-spread name recognition where people already have commitment to your franchised-products for it has already a good reputation to the community. They will also give security of your money and sometimes they help you in your initial investment.
2. Initial and on-going support of the Franchisor
They will assist you in your site selection and development, lease negotiation, standard outlet design and decoration, equipment purchasing, builders and shop fitters. The will give an initial management training of franchisee’s employees and...

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