3.

0 Ownership
The state, the act, or the right of owning something, such as possessing something, is
referred to as ownership. Additionally, the term might be used to refer to an
organisation or a collection of owners. It is the legal right to a lawful claim or title that
cannot be transferred or given away to anyone else. When someone has ownership of
an item of property, they have the right to possess it, use it, give it away, leave it in
their will, destroy it, or sell it. If you are the owner of something and you have
ownership of it, then this indicates that the item is yours and that you are the owner.
The term can be used to refer to a wide variety of things in addition to individuals. Every
opportunity to purchase a franchise calls for an initial financial outlay, and the vast
majority of opportunities stipulate a minimum net worth or other requirements to ensure
that prospective franchisees have sufficient funds to weather the storms that inevitably
arise as their businesses grow. Young franchisors who do not yet have well-established
reputations have a difficult time recruiting franchisees. Prospective franchisees are
uncertain as to whether or not the value of the system will be sufficient to justify the
royalty rate that they will be required to pay to the franchisor. It is impossible for
franchisors to charge a high royalty rate for a system that has little to no value because
franchisees receive their compensation as a percentage of revenues after deducting all
expenses, which includes the royalty rate. If franchisees are required to pay a significant
amount of a percentage of their sales to a system that generates low revenues, then
they will not be able to recoup the money that they have spent (Shane et al., 2006).
Therefore, it is essential for small start-up businesses to locate a partner or investor who
can provide financial backing in order to expand their company.
Angel investors are individuals who have the intention of investing in companies
while they are still in their formative stages. These are high-risk investments, and an
angel investor's portfolio should not consist of more than 10 percent of them. The
majority of angel investors are wealthy individuals who are looking for a higher rate of
return than what is typically offered by traditional investment options. Angel investors
typically invest in the entrepreneur rather than the profitability of the firm, which allows
them to offer more favourable terms than traditional lenders. This allows start-ups and
small businesses to get off the ground. Angel investors are more concerned with
assisting businesses in taking their first steps than they are with the potential return
from the firm. Angel investors are also referred to as seed investors. Venture capitalists
and angel investors couldn't be more different from one another. Angel investors are
also referred to as informal investors, angel funders, private investors, seed investors,
and business angels. Other terms for angel investors include seed investors and private
investors. These are typically extremely wealthy individuals who make financial
investments in companies in exchange for ownership stock or convertible debt. Some
angel investors choose to invest through online crowd funding platforms, while others
choose to join angel investor networks in order to pool their capital. Angel investments
are also much more private; in fact, they are quite personal. Angel investments are
significantly more personal. Angel investments are almost never made public. It's
possible that only a select few people are aware of a particular angel investment.
Because these dealings are kept so confidential and are never made public, there is a
dearth of relevant statistical data. As a result, estimates must be derived from extremely
small samples or extrapolated from data in related areas.
As a direct consequence of this, the contention is made that franchised businesses
are fundamentally distinct from conventional companies. Instead of the more traditional
levels of shareholder capital and workers, we find self-funded franchisees positioned in
the middle of the franchisor and the customers. Franchisees contribute not only financial
resources but also knowledge of local labour markets and geographic regions, in addition
to contributing their own management labour, to the overall franchise system. To put it
another way, they offer a balanced combination of financial, managerial, and
informational capital in one convenient package. The franchisor's business model,
including its firm and product branding, retail formats, and managerial technologies, is
characterised by the presence of an asset intangibility that sets it apart from other
business models. Those who have their sights set on becoming successful franchisors
might have a difficult time developing these aspects of their businesses effectively
(Stanworth et al., 2004).
iv. What (if any) type of advisor council/board does franchisor offer?
The relationship between franchisee and franchisor is beneficial for both parties. In
many different domains, such as marketing, operations, finance, human resources, and
governance, each partner is dependent on the other and has an impact on the domain in
question. In the case of franchising, unfortunately, there is a likelihood of inter-group
conflict occurring among members. This is due to the fact that franchisors and
franchisees have different lenses through which they perceive solutions, and it is unusual
for one group to belong to the other. In addition, the power dynamic is favourable for
the franchisor because the franchisor is the one who owns the rights to the trademark
and decides the terms of the contract. In this article, we provide a conceptual framework
to illustrate how the responsibilities of a franchise board are impacted by various
organisational theories. Research on boards of non-profit organisations carried out by
Cornforth and Edwards (1999) and a typology of corporate boards carried out by Hung
(1998) had an effect on our conceptual framework for board responsibilities. These
researchers' conceptualizations have contributed to a better understanding of why
boards play a variety of roles, which is one of the benefits of the research.

Board Role Theory Focus

Monitoring Agency Internal

Linking Recourse Dependency External

Strategic Stewardship Organization

Representing Stakeholder Individual

Figure 1: Theories explaining franchise board roles

References

Cornforth, C., & Edwards, C. (1999). Board Roles in the Strategic Management of Non-profit
Organisations: Theory and practice. Corporate Governance: An International Review ,
7(4), 346–362. https://doi.org/10.1111/1467-8683.00165
Hung, H. (1998). A typology of the theories of the roles of governing boards. Corporate
Governance: An International Review, 6(2), 101–111. https://doi.org/10.1111/1467-
8683.00089
Shane, S., Shankar, V., & Aravindakshan, A. (2006). The effects of new franchisor
partnering strategies on franchise system size. Management Science, 52(5), 773–787.
https://doi.org/10.1287/mnsc.1050.0449
Stanworth, J., Stanworth, C., Watson, A., Purdy, D., & Healeas, S. (2004). Franchising as a
small business growth strategy: A resource-based view of organizational development.
International Small Business Journal, 22(6), 539–559.
https://doi.org/10.1177/0266242604047409