Professional Documents
Culture Documents
Franchising
Franchising
What is a franchise?
License to use an established brand
Use is very restrictive many rules to be
followed. Provide a proven successful business format Entrepreneurship for people that are not particularly entrepreneurial.
Advantages of Franchising
Buying a name/reputation Established markets Technical/management assistance Standardized procedures Quality standards Selection of location Facility design Quicker cash flow
Disadvantages of franchising
Loss of independence High initial fees High royalties and advertising allowances Contractual restrictions Inapplicable advertising Termination clauses Not receiving promised help Unsuitable products Lack of competitive advantage
Franchising Agreements
Issue
Franchise fee Royalties
Questions to Resolve
Amount? One time? Per unit? Amount? Percentage of net or gross? Sliding scale?
Advertising
Offerings Equipment Location Operations Reporting Disputes Termination
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Franchisee Guidelines
Perform a self-evaluation Investigate the franchisor Study the industry and competition Study the Uniform Franchise Offering Circular Investigate the franchisors disclosure Know your legal rights and retain counsel
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