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1. Hồ Lam Giang 2. Phạm Minh Huế 3. Phạm Thanh Tâm 4. Lê Diệu Thúy 5. Nguyễn Thị Huyền 6. Hoàng Thị Thúy Mùi
Potiental franchisor (Trung Nguyen coffee) V. Threats 1. For the franchisor (presented by Lê Diệu Thúy) 2. Definition (presented by Phạm Minh Huế) 1.GENERAL OUTLINE I. Conclusion (presented by Phạm Minh Huế) . Examples (presented by Hoàng Thị Thúy Mùi) 1. For the franchisee (presented by Nguyễn Thị Huyền) IV. Opportunities 1. Franchisor 2. Successful franchisee (McDonald’) 2. For the franchisee (presented by Phạm Thanh Tâm) III. Franchisee II. For the franchisor (presented by Hồ Lam Giang) 2.
we can understand franchisor as a firm that sells to others the right to sell or rent its products and to use its name. 2. a franchisee is One that is granted a franchise. Definition 1. a franchisee is also usually given an exclusive area. where no other franchises belong to the same underlying business can set up shop in order to prevent internal competition. II. After all. in return for an agreed-upon fee. The franchisor allows its franchisees to use these rights and trademarks to do business. For the franchisor Additional Revenue . Opportunities of franchise 1.DETAILS OF OUTLINE I. as to market a company's goods or services in a certain local area. and products. The franchisor owns the overarching company. but gives the right to the franchisee to run the franchise location. In addition. The operator of an individual franchise is known as a franchisee. Franchisee A franchise is a type of business operation where an entrepreneur follows a proven business model as opposed to starting completely from scratch. In short. who pays a fee to a franchisor to obtain the rights to open a unit. The franchisor usually charges the franchisee an upfront franchise fee for the rights to do business under the franchise name. the franchisor usually collects an ongoing franchise royalty fee from the franchisee. Franchisor The company that allows an individual (known as the franchisee) to run a location of their business. Furthermore. trademarks.
Business expansion and the presence everywhere of the chain stores will include images of products going into the customer's mind more easily. Increasing Royalties The franchisee must pay royalties rental brand and charges for doing business with the name and the system's franchisor. Ease of Expansion A franchisor can easily expand his business by granting new franchises to franchisees in untapped markets. When using the franchise. Leveraging human resources The franchisee will be the capital for the business and this is the driving force to promote their work better. The franchisor can use these additional sources of revenue to reduce operating expenses such as advertising and distribution costs. a franchisee may be more motivated than an employee. promoting their brands. he may be more likely to work harder. the franchisor will have the advantage in advertising. Thus. the result is more revenue through increased royalties. which increases the chances for success. Because the recipient is entitled to their owners more responsible. According to Franchise Key. He may be able to locate potential franchisees who are more familiar with the nuances of a particular market than he is. the franchisee must purchase products and materials by which the franchisor can maximize their income. Since the franchisee has a personal financial stake in the success of the business. For the franchisor.Whenever a franchisor grants a new franchise location. franchisors utilize human resources from the right. At the same time. he enters into a franchise agreement in which the franchisee agrees to pay fees or royalties. . The franchisor will reap the benefits of additional royalties and increased brand recognition. Prompting promoters. The revenue can also be used to increase the franchisor's cash flow. such as a branch manager of a satellite operation.
Moreover. turnkey operations. Product and system activities to be standardized You get a lot of help starting your business and running it afterwards. you get all the equipment. For the franchisee Lower Failure Rate When you buy a franchise. In many cases. therefore they can save lots of money. for instance. the franchisee don’t have to study marketing or set the network. franchisees can access the location where the franchisor can not reach and they can understand local information than the franchisor. independent businesses stand a 70 to 80 percent chance of NOT surviving the first few critical years while franchisees have an 80 percent chance of surviving. you also get ongoing training. When you buy a franchise. Statistics show that franchisees stand a much better chance of success than people who start independent businesses. Buying Power Your franchise will benefit from the collective buying power of the parent company as the franchisor can afford to buy in bulk and pass the savings along to franchisees.In addition. Buying a franchise can be like buying a business with built-in customers. Your franchise will reap the benefit of the parent company's national marketing campaigns. in fact. With using franchise system. thanks to the famous brand of parents company. Inventory and supplies will cost less than if you were running an independent company. the franchisee can easily earn more money than any independent company . and help with management and marketing. supplies and instruction or training needed to start the business. Many franchises are. you are buying an established concept that has been successful. 2. Star Power Many well-known franchises have national brand-name recognition. Profits A franchise business can be immensely profitable.
qualities of products. Owners can become reactive and expect the head office to solve all the problems. a percentage of your franchise’s business revenue. brochures… Besides the original franchise fee. services…All the things they want to change must be under controls of franchisor’s agreements. banners. posters. They also need to pay for training programs. In your own business. For the franchisee Less Freedom: Franchisees are required to share financial information and conform to uniform operating procedures. If this is your choice. royalties. logos.Easier Staff Recruiting Finding good employees is a critical success factor for many independent small business owners. A franchise business with a recognized name will have greater recruiting pull than an unknown business entity. III. Threats of franchise 1. Unpredictable troubles The franchisor may not have the ability to provide market or field support. you will have to have extremely deep pockets or the ability to arrange the necessary financing. and advertising. Each and every year franchisees are required to make royalty payments in return for support in operations. High costs: Buying the well-known franchise is very expensive. The franchisee must follow compulsory standards closely about prices. the only person you count on is you. . the franchisee will need to be paid to the franchisor each month.
Unfair competition The CEO of the franchisor is faced with a difficult partner that is no small brand owners (buyers) tend to become competitors of the franchise in an effort to win customers and market share. 2. For the franchisor Brand influence The image of whole system will be destroyed if the franchisee operates too badly or be criticized by customers. IV. Just because a business is offering franchises is no guarantee that the franchise you buy will be successful. perhaps inexpensive franchise can be a real gamble. Loss of trade secret The risk of stolen trade secret in the process of operation is also a challenge for a brand manager. This feature makes the franchise business can hardly take place in areas where legal systems are not strong enough.Buying a little-known. The purchaser will be the brand franchise training mode of operation provides the special recipes typical brand. Examples 1. Successful franchisee . franchisee can’t take part in term of contract termination if the parents companies go into troubles. the management of managers will become difficult. Difficulty in management When the dense network of distributors exist weaknesses with a large number of franchise stores located everywhere. Term of deadline in franchise agreement is limited.
The level of market penetration of only McDonald’s stop at restaurant for 500.000 restaurants spread across the states of the United States. Trung Nguyen otherwise fall into the loss of quality control and uniformity of his began selling franchise because large numbers without adequate preparation. The success of McDonald’s depended on the way they did in the market. In future. or a modest airconditioned restaurant serves very good workmanship and poor workmanship popular restaurant.707 restaurants located in the external market. They should take advantage the company’s strength and learn how to manage franchise system to avoid failure. East Asia and Latin America.Indeed there is quite consistent with customary appearance that fell too saggy. In addition. this figure accounted for 53% of total revenue of $40 billion company. By 2000. Mc Donald’s only served less than 1% of global population. decoration does not follow a uniform standard general. .McDonald’s was founded in 1955. in 30 years the company has quickly dominated the local market with more than 10. but in reality to adjust the system with more than 400 cafes spread throughout the country is a challenge of operating each cafe and the owner of the brand in general. They took advantage of all opportunites to develop their business based on franchise system. The revenue is growing and growing. Potiential franchisor In the early years by the pioneer unit in the area of franchise in Trung Nguyen of Vietnam should have been quite confused in his direction and relatively easy to sell a franchise to the current situation there are too many cafes along bearing Trung Nguyen brand but not the same class. but it’s totally possible to help their business become the leader in coffee market. Trung Nguyen has some troubles in becoming a successful franchisor. That’s why ‘Trung Nguyen’ is regarded as ‘potiental franchisor’. The franchisee worked well based on the parent companies’experience and well-known brands. From late 2002 Trung Nguyen was invited to the Australian expert to remedy this situation.000 people. McDonald’s earned $21 billion from 28. 2. they will expand their brand in 3 big markets: Europe.
it is best to do as much research as possible. Whether you are franchisor or franchisee.com http://www. Conclusion This essay is all about the franchise market.V. Resources and References: http://franchises.about.com .franchisedirect. Both of opportunities and threats are divided equally for two parties. So with this essay.com http://www.franchise. I hope you can decide which exactly you want and choose the best way to go.
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