Franchising Essay

2324 WordsMar 9, 201210 Pages
Franchising, advantages & Disadvantages, Parties. Businesses for which franchising work best have one or several of the following characteristics • A good track record of profitability • Ease of duplication • Detailed systems, processes and procedures • A unique or unusual concept • Broad geographic appeal • Relative ease of operation • Relatively inexpensive operation. • Obligations of the parties • Each party to a franchise has several interests to protect. The franchisor is involved in securing protection for the trademark, controlling the business concept and securing know-how. The franchisee is obligated to carry out the services for which the trademark has been made prominent or famous. There is a great deal of standardization required. The place of service has to bear the franchisor's signs, logos and trademark in a prominent place. The uniforms worn by the staff of the franchisee have to be of a particular design and color. The service has to be in accordance with the pattern followed by the franchisor in the successful franchise operations. Thus, franchisees are not in full control of the business, as they would be in retailing. • A service can be successful if equipment and supplies are purchased at a fair price from the franchisor or sources recommended by the franchisor. A coffee brew, for example, can be readily identified by the trademark if its raw materials come from a particular supplier. If the franchisor requires purchase from his stores, it may come under anti-trust legislation or equivalent laws of other countries.[1] So too the purchase of uniforms of personnel, signs, etc., as well as the franchise sites, if they are owned or controlled by the franchisor. • The franchisee must carefully negotiate the license. He and the franchisor must develop a marketing or business plan. The fees must be

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