Other advantages include better raising finance opportunities due to lower risks associated with already prevalent brand expansion, employee training by a franchisor, overall reduction of business risk to the franchisee, external benefiting from the expansion of the franchisor brand and chain, less expenses on advertisement and Public Relations campaign and access of the franchisor to most public advertisement resources, business insurance and further on. The study of Barrow, Golzen and Kogan accents that 'In the U.S.A., for example, McDonald's, one of the world's largest franchisors, spends more on TV advertising than Kellogg's, and virtually the same as the Ford Motor Company'. (Barrow, Golzen & Kogan 2000 p.37). As the franchisee operates in local to him market, he is able to exploit this insight knowledge and outperform the market prevalent competitors. According to Mendelsohn, 'Sales in 1997 reached £7 billion, compared with £5.2 billion in 1990, which represents somewhat less than the 50% increases in systems and franchisee numbers over the same period'. (Mendelsohn, M 2001 p.321). The operations manual provided typically by a franchisor to the franchisee benefits them both. 'The operations manual is a complete description of all the operating policies, procedures, methods and systems used to run the business'. (Clarke, G 1999 p.30). The operations manual enables the franchisor to make sure, that although each business is independently owned and operated, the same levels of quality and customer service are consistent throughout the network. A small business that is thinking about becoming a franchisor can illustrate how they want the business to be run on a day-to-day basis through the operations manual. An operational manual may include some of the following sections; opening hours and days, pricing policies,...
The operational manual is very useful to the franchisee in that it helps them with the day-to-day running of the business. Also if there are any changes made to the running of the franchise the operations manual will be updated accordingly. A franchisor like Kentucky Fried Chicken (GB) Ltd. may include the following sections in their operations manual; 'cleaning routines, recipes, methods of preparations of food, kitchen procedures and customer complaints procedures'. (Mendelsohn, M 2001 p.69).
Franchising is a cooperative agreement by which one firm (the franchisor) sells the right to market goods and services under its brand name and uses its business practices to a second firm (the franchisee). As an organizational form, franchising is a hybrid between market and hierarchy"(Gomez, Gonzalez and Vazquez, 2010, p.463). The franchisor as well as the franchisee play an important role in making a particular brand name successful. In
Franchising of Hotels: Advantages vs. Disadvantages The objective of this study is to examine the advantages and disadvantages of franchising hotel operations. Toward this end, this study will conduct an extensive review of literature in this area of inquiry as well as interview two individuals, Mr. X, and Mr. Y in order to determine whether there are more advantages or disadvantages. Mr. X is the General Manager of a well-known hotel in
Most recently, Entrepreneur magazine named Liberty Tax Service #50 on its list of Fastest Growing Franchises (May 2003). In 2003, Entrepreneur magazine named Liberty #50 on its annual Franchise 500, and #15 on its list of Top Low-Cost Franchises for 2003 in its Be Your Own Boss issue. With nothing as certain as taxes, what other industry offers the perpetual product of tax preparation, and a growing market even in
Another study by Guilloux, Gauzente, Kalika, and Dubost (2004) indicated that the most important aspects of successful franchising are advice as well as assistance then followed by the level of name recognition of the franchisor, the chances of eventually owning multi-outlets, support services as well as the potential profitability. The existing literature indicate the need for more theoretical backing (Combs et at, 2011,p.102). More studies are necessary in order to explain
Franchise Business in China Franchising is one of the entry methods used by multinationals and foreign businesses to venture into new markets. A Multinational that is trying to enter the Chinese market will experience several pros and cons of the market. Factors in favor of franchising for any MNC are such that the market is favorable for franchises as many thrive in a ready market. Secondly, the market is not only
JudgmentFranchising may be described as a form of marketing whereby a business owner grants individuals the right to a trademark for the purpose of undertaking a commercial operation ((Rosado-Serrano, Paul, & Dikova, 2018). In our example is a franchise beauty salon. One of the advantages that accrues to a franchise beauty salon is customer loyalty. In today�s world, most customers want to be associated with a specific brand and in
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