Franchising and the

Entrepreneur
Where else can we find a job creator, an
economic stimulator, and a personal
wealth creator that gives the
opportunity to realize dreams and
financial security for families beyond
wildest expectations? …Dan DeBolt
 Franchising
A system of distribution in
which semi-independent
business owners pay fees
and royalties to a parent
company in return for the
right to become identified
with its trademark, sell
its products and services,
and use its business
format and system
 Types of Franchising

 Trade name
 Product

distribution
 Business

format
Benefits of Buying a Franchise

 Management training and support

 Brand name appeal
 Standardized quality
 National advertising
 Financial assistance
 Proven products and business formats
 Centralized buying power
 Site selection and territorial protection
 Greater chance of success
 Drawbacks of Buying a
Franchise
 Franchise fees and ongoing royalties
 Strict adherence to standardized
operations
 Restrictions on purchasing
 Limited product line
 Contract terms and renewal
 Market saturation
 Less freedom
 10 Myths of Franchising
 Safest way to go
 Less money to open
 Bigger franchise organization,
more successful
 Use 80% of business format
 All are the same
 No need for hands-on management
 Anyone can be successful
 Cheapest way to get into business
 All problems will be solved
 Run things the way I want to
 Franchising and the Law
 Uniform Franchise
Offering Circular
(UFOC)
 Federal Trade
Commission-Trade
Regulation Rule
(23 major topics)
Right Way to Buy a Franchise
 Evaluate yourself
 Research your market

 Consider your options

 Get a copy of their UFOC

 Talk to existing franchisees

 Ask some tough questions

 Make your choice

Trends Shaping Franchising

Multiple-unit franchising-a method

of franchising in which a
franchisee opens more than one
unit in a broad territory within a
specified time period

11%
 Trends
International
Opportunities
China-1,900
franchises,
82,000 outlets
McDonalds-119
countries, 10,000
outlets
 Trends
Smaller, nontraditional locations-
intercept marketing: the principle
of putting a franchisee’s products or
services directly in the paths of
potential customers, wherever they
may be

ex. Dunkin Donuts

 Trends

Conversion Franchising-a franchising

trend in which owners of
independent businesses become
franchisees to gain the advantage
of name recognition
ex. Century 21
 Trends

Master Franchising-a franchise

that gives a franchisee the right
to create a semi-independent
organization in a particular
territory to recruit, sell, and
support other franchisees
 Trends
Piggybacking-a method
of franchising in
which two or more
franchises team up to
sell complementary
products or services
under one roof
ex. Taco Bell, KFC, Pizza
Hut, A&W-Yum! Brands
 Trends

Serving Dual-Career Couples

And Aging Baby Boomers