HASSAN IJAZ

BECE-20-C

CMS ID: 331427

ENTREPRENEURSHIP

ASSIGNMENT NO. 02

Outline the differences in three different types of franchising.

Mention which type is the most successful in Pakistan's market
and state your answer with reasons.

Here's a breakdown of the differences between three common franchise types, along
with the most successful model in the Pakistan market:

1. Product Distribution Franchising

• Focus: Dispatch of franchisor products within an exclusive area.

• Franchisee: As a rule, this franchisee, who owns a store, will be selling his
franchisor's brand product with no other additional services.

• Example: Phone firm franchise dedicated only to individual company side with phones
and accessories.

2. Business Format Franchising

• Focus: Duplicating the franchisor's business while incorporating the entire range of its
product equivalent, including, of course, its identity, brand, processes, and services.
• Franchisee: To function as a franchisee, the candidate receives a detailed business
strategy, operational manuals, and adequate instruction to act by the franchisor's
established techniques.

• Example: The McDonald's franchise with the complete menu, standard operations,
and the brand experience which is common across all the franchises globally.

3. Investment Franchising

• Focus: By investing in a franchise that has a recognized brand with a track record, but
with lower operational involvement by the franchisor, the risk could be optimized.

• Franchisee: Doles out capital and can maybe be entrusted with some tasks like
management; yet, more often the franchisee has to depend on the franchisor for
operational experience.

• Example: A select few hotels operate investment franchising systems, which would
distribute management duties to the owner whereas marketing and branding will remain
the sole responsibility of the franchisor.

Most Successful Franchise Model in Pakistan:

Business Format Franchising is generally considered the most successful model in

the Pakistani market Franchising model predominantly for Business is viewed as the
topmost profitable enterprise in Pakistan. Here's why:

• Strong Brand Recognition: The widespread sharing of franchises with the universal
name recognition and marketing knowledge of the franchisor is known as the business
format franchise model. Such knowledge is important in a new market like Pakistan.

• Standardized Operations: The franchisor is the one who offers a tested and tried
way of operation, which guarantees uniformity about quality products and desirable
customer service, across the branches. The significance of this step is to enhance the
consumers´ trust that might be relatively unfamiliar with the brand that is from some
other country.
• Training and Support: Business format franchises provide franchisees with a training
program plus on-going assistance all of which play a crucial role in the franchise growth,
especially among the beginners in the establishment of the first business in Pakistan.

• Limited Risk: The established business model does not make the risk you have to
deal with as a franchisee as big compared to the one you will encounter as the owner of
a new creation.

Although other modes would be available, a business would opt to choose the extensive
approach which enables international royalties and lets Pakistani entrepreneurs buy
them.