Franchise Management (1)

7/31/2019 Franchise Management (1)

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FRANCHISE

MANAGEMENT


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FRANCHISE

FranchisingA marketing system revolving around a two-partyagreement, whereby the franchisee conducts businessaccording to the terms specified by the franchisor

FranchiseeAn entrepreneur whose power is limited bya contractual agreement with a franchisor

FranchisorThe party in the franchise contract that specifies themethods to be followed and the terms to be met by

the

other party


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THREE KINDS OFFRANCHISES

Trade Name Franchise

Grants the right to use a widely recognized name within aparticular territory True Value Hardware, Associated Grocers Inc (AGI), Century 21

Product Distribution Franchise (Dealership)

Allows you to sell a specific, brand-name product in a specifiedterritory Snap-On Tools, Toyota

Business Format Franchise Provides an entire business plan, marketing, and operating

system

Guidance from the franchisor is ongoing; supervision &monitoring are continuous Subway, McDonalds


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How to acquire

franchise1. DECIDING WHAT FRANCHISE YOU CAN AFFORD

2. STEPS AFTER CHOOSING FRANCHISE

3. HIRING FRANCHISE ATTORNEY

4. PREPARING YOUR BUSINESS PLAN


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Costs of franchisee

1 FRANCHISE FEE

2 LEGAL FEES

3 BUILD OUT COSTS

4 SUPPLIERS

5 WORKING CAPITAL


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Merits of franchise

Turnkey System: if your skill are weak in sales and marketing then turnkeySystem is best..Franchise Support: Buying a franchise offers the opportunity to share yourchallenges with other like-minded entrepreneurs

Brand Name: The more established franchises provide a market awareness& brand name to franchisees

.Lower Inventory Prices:The collective buying power of a franchise groupallows for lower costs in purchasing inventory and equipment.

Easier Staff Recruiting: A franchise business with a recognized name willhave greater recruiting pull than an unknown business entity.


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Demerits of franchise

Less Freedom:Franchisees are required to share financial information and conform to uniform

operating procedures

Higher Start-Up Costs:Buying a brand name franchise is often beyond the financial capability of manypotential business owners

Broken Promises:The franchiser may not have the ability to provide market or field support. Owners can become reactive and expect the head office to solve all the problems. In your own business, the only person you count on is you


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On side of franchisor.

PROS

Capitalized ExpansionContinuing Revenue

Streams

Brand Development

CONS

Legal Regulation Investment


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On side of franchisees

PROS

Established Brand Established Business

Systems

Training and Support

CONS

Benefits Could ProveIllusory

Low revenues


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ROYALTY

The regular monthly income that the franchisor earns is based on royaltypayments from each franchisee.

These payments are collected to pay expenses that are incurred at the franchisor'sheadquarters such as rent, utilities, and employee compensation.

The most frequent type of format is having the fee calculated on about5-8 percent of the total gross sales that the franchisee earns.


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STEPS FOR SUCCESSFUL

FRANCHISE

1 GETTING STARTED

2 UPGRADING FROM BRAND TO CORPORATE

3 BUILDING WORD CLASS ORGANISATION


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TOP 20 FRANCHISE

1. Subway Submarine sandwiches & salads$84,300 - $258,300

2. McDonalds Hamburgers, chicken, salads$1,057,200 - $1,885,000

3. 7-Eleven, Inc Convenience stores $40,500 -$775,300

4. Hampton Inn/Suites Hotels $3,716,000 -$13,148,800

5. Supercuts Hair Salons $112,600 - $243,200

6. H & R Block Tax preparation & filing$34,438 - $110,033

7. Duncan Donuts Coffee, doughnuts, etc$537,750 - $1,765,300

8. Jani-King Commercial cleaning $13,200 -$93,200

9. Servpro Disaster restoration & cleaning$127,300 - $174,700

10. AmPm Mini Market Gas/Store $1,835,823 -

$7,615,065

11. Jan-Pro Commercial cleaning$3,300 - $54,300

12. Kumon Math Supplementaleducation $36,538 - $145,250

13. Stratus Building Commercialcleaning $3,450 - $57,750

14. Miracle-Ear Hearing instruments$122,500 - $570,000

15. Pizza Hut Inc Pizza, pasta, wings$302,000 - $2,100,000

16. Hardees Burgers, chicken, biscuits$1,182,000 - $1,583,500

17. Dennys Inc Full-service restaurant$1,200,000 - $2,600,000

18. Jazzercise Inc Dance/fitness classes$2,980 - $38,400

19. Matco Tools Mechanics Tools &Equip $79,926 - $188,556

20. UPS Store Postal/Business Services$150,980 - $337,950


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BIBLIOGRAPHY

1 franchise.about.com

2 franchisedirect.com

3 franchiseesentials.com

4 franchiselawsolutions.com


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PRESENTED BY

41 DHARIT MEHTA43 PARSHVA SHAH3 HARSHIL KAPADIA4 MAYANK01 AKSHAT AGARWAL20 JEET HARIA

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Franchise Management (1)