Franchising

Executive Summary

This study is about the changing of new business approach i.e., Franchising. This approach is widely considerable among the growing market phase these days. Franchising is the new way of starting and operating a small business which is more successful than establishing and involving in a new independent small business. Through this business style the new business world is reaching the top of the growth graphs. All the leading companies have even shifted their business activities to franchising operations. This approach to business has given a view of cost saving opportunities and involves less risky aspects of doing business.

Table of Contends

Executive Summary2

Thesis statement5

Introduction5

Discussion7

Buying a Franchise8

Why is it Important?8

Methods of Distribution9

Business format franchises for service9

Business format franchises for product10

Product Franchising10

Affiliation Franchises10

Methods of Expansion10

Other business goals11

Multiple Forums of Franchising11

Investment Opportunities12

“Business Opportunities” Laws12

The Advantages for the Franchisor13

Inconvenience to the Franchisor14

The Advantages for the Franchisee16

Disadvantages for the Franchisee17

Franchising or New Business - Which is better?18

To Set-up versus Already set up19

No Fees versus Franchise Fees19

Own Marketing versus No Marketing19

Pricing Strategy versus Fixed Pricing20

Full Freedom versus Limited Freedom20

Large Mistakes versus Small Mistakes21

Conclusion21

References23

Franchising

Thesis statement

The research is about the changing trends in adaptation of business processes, focusing Franchising as the dominant way of doing business with all its S.W.O.T analysis in comparison of creating an independent start up.

Introduction

Franchising is the new way of starting and operating a small business which is more successful than establishing and involving in a new independent small business. This was the predominant opinion since last few decades (Sadi & Syed, 2011). The closer view to the merits and demerits of franchising in comparison to the non-franchising business will give a better understanding of the topic. “The benefits and weaknesses for starting a franchise as opposed to an independent business”. To get a sound answer to this finding, the core notion of the topic 'franchising' and 'small business' first need to be understand. So what is franchising? A very perceptive definition comes from Kosher (Syed, 2011). According to him;

Franchising is a method of doing business whereby a company (the franchisor) grants to others (the franchisees) the rights to produce, distribute, sell, or market the company's products or services. In doing so, franchisees are permitted to use the franchisor's name, reputation, trademark, procedure and selling techniques. To obtain these rights, each franchisee agrees to pay the franchisor a sum of money (the franchise fee), a percentage of annual gross sales, or both (Syed, 2011).

This expansion of words of franchising “a method of doing business” is seen with different views. Many authors have cited it with this view of notion, “marketing system” (Richard & John, 2004) and form of marketing and distribution and others found it methods of raising capital. Many others have cited it as the contractual business with franchising agreements. This franchise agreement highlights the rights and obligations of the two parties. (Inma, 2005). Hence, all these citations give a view that franchising is more a marketing tool of doing business that distributes goods and services and it expands a ...