WHAT IS DISADVANTAGES

FRANCHISING? OF FRANCHISING
semi-independent business owners Strict adherence to standardized
(franchisees) pays fees and royalties to a operations
parent company (franchiser) in return to the Restriction on purchasing
right to use the trademark sell its products Limited product line
and services,use its format and system Unsatisfactory training programs

TYPES OF FACTORS THAT MAKE A

FRANCHISING
Topic 6 FRANCHISE APPEALING
Unique concept or marketing approach
Trade Name Profitability
Product Distribution Registered trademark
Pure Business system that works
Solid training program
Affordability
Positive relationship with franchisees

BENEFITS OF WHAT IS CO
FRANCHISING BRANDING?
National advertising programs TRENDS SHAPING Two or more franchises team up to
Financial assistance FRANCHISING sell complementary products or
Proven products and business Changing face of franchisees services under one roof.
formats International opportunities
Centralized buying power Smaller, nontraditional locations
Intercept Marketing
Conversion Franchising
Refranchising
Multi-unit franchising
DIFFERENCES BETWEEN FRANCHISOR & FRANCHISEE
ELEMENTS FRANCHISOR FRANCHISEE

Site selection Oversees and approves; may choose a site. Chooses site with franchisor’s approval.

Design   Provides prototype design. Pays for and implements design.

Makes general recommendations and training

Employees  Hires, manages, and fires employees.
suggestions. 

Products and services   Determines product or service line. Modifies only with franchisor’s approval.

Prices  Can only recommend prices. Sets final prices.

Establishes quality standards; provides list of Must meet quality standards; must purchase
Purchasing approved suppliers; may require franchisees to only from approved suppliers; must purchase
purchase from the franchisor. from supplier if required.

Develops and coordinates national Pays for national ad campaign; complieswith

Advertising adcampaign; may require minimum level local advertising requirements; getsfranchisor
ofspending on local advertising. approval on local ads.

Sets quality standards and enforces them with Maintains quality standards; trains employees to
Quality control 
inspections; trains franchisees. implement quality systems.