FRANCHISING

AJI R LAL
CONTENTS

1. Franchising
2. Parties involved in
franchising
3. Type of Franchising
4. Advantages
5. Franchise
Perspective
6. Conclusion
FRANCHISING

Franchising is the practice of the right to use a firm's

business model and brand for a prescribed period of
time.
It is a deal between a franchisor and franchisee. Here
franchisor agrees to share his trademarks, copy
rights, technological knowhow, with franchisee. In
return of which the franchisee has to pay a fixed
amount of royalty to the franchisor.
CONT…

Essentially, and in terms of distribution, the franchisor

is a supplier who allows an operator, or a franchisee, to
use the supplier's trademark and distribute the
supplier's goods. In return, the operator pays the
supplier a fee
PARTIES INVOLVED IN FRANCHISING

The parties involved in franchising are franchisor

and franchisee.
Franchisor is a person who has an existing
business and wants to expand or diversify it.
Franchisee is a person who wants to invest his capital
in the existing business of franchisor.
TYPE OF FRANCHISING

1. Manufacturing
2. Retailing
3. Standardized business structure
ADVANTAGES OF FRANCHISING

• Enables franchisee to use brand name of the franchisor.

• Enables the franchisee to enter the well-established business.
• Enables the franchisee to get marketing support from
franchisor.
• Franchisee can be aware of the new technologies used by
franchisor.
• Franchisee can use reedy made business plan developed by
franchiser.
FRANCHISE PERSPECTIVE
FRANCHISE PERSPECTIVE

Two kind of perspective;

1. Franchisor's
2. Franchisee’s
THE FRANCHISOR'S PERSPECTIVE

1. Lesser capital needs

2. Shared risk
3. Quicker expansion
4. Local motivation.
5. Opportunity and risk
6. Effective division of work generates less overhead and
less risk
FRANCHISEE’S PERSPECTIVE

• Get to know the local growers

• Promote a healthy lifestyle
• Grow with the industry
• Embrace the innovative concept that is the driving
force
CONCLUSION

For the franchiser, the franchise is an alternative to

building "chain stores" to distribute goods that avoids
the investments and liability of a chain. The
franchisor's success depends on the success of the
franchisees. The franchisee is said to have a greater
incentive than a direct employee because he or she
has a direct stake in the business.
THANK YOU