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Operating Franchises.

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Business Studies Coursework Operating Franchises Irfaan Karim Operating Franchises Introduction A franchise is a legal and commercial relationship between the owner of a business, a trademark, service mark, trade name or advertising symbol and an individual or group seeking the right to use that identification in a business. The franchise agreement governs the method for conducting business between the two parties. Industries that rely on franchised businesses to distribute their products and services touch every aspect of life, from car sales to fast foods and tax preparation. In its simplest form, a franchiser owns the right to a name or trademark and sells that right to a franchisee. This is known as product/trade name franchising. In the more complex form, known as business format franchising, a broader and ongoing relationship exists between the two parties. Business format franchises often provide a full range of services, including Site selection, Training, Product supply, Marketing plans and Financing. Generally, a franchisee sells goods or services that are supplied by the franchiser or that meet the franchiser's quality standards. The example I will be using as a franchise will be McDonald's. McDonald's has always been a franchising Company and has relied on its franchisees to play a major role in its success. McDonald's remains committed to franchising as a predominant way of doing business. Approximately 70% of McDonald's worldwide restaurant businesses are owned and operated by independent businessmen and women, the franchisees. ...read more.


More restaurants are being opened and are being taken over by franchisees. New menus were initiated to attract more customers and also try to bring in healthy foods to bring in more customers as well as remove the name that had been put upon them as 'obesity creators'. Franchising: Easy or Difficult? A good thing about franchising is that the franchisee will get a lot of help. Whereas when you start a business from scratch, you are on your own, when you start a franchise; the franchisor is there to help you succeed. A good franchise system trains you to be a successful businessperson. It's not inexpensive. You pay for the name, the marketing expertise, the system, and the training. But know too that not all franchises are expensive. Some are home-based, others are services, and still others are otherwise very affordable and easy to get into. The other downside is that you have less independence as a franchisee than you would as a regular entrepreneur. The system has been set up as it has for a reason, and in addition, the franchisor trusts you with its brand and goodwill, so you have to do things their way to a certain extent. The important thing to know is that not all franchises are created equal. Just as in any industry, there are good franchises and not-so-good franchises. For a McDonald's franchisee, neither is it the cheapest route to riches. ...read more.


Evaluation From my research I have found out many facts, advantages and disadvantages of operating a franchise. Franchising is a very successful way of expanding your business. Since a franchise is usually a duplicate of an already successful business, it should succeed. Franchising allows an individual to feel the pride and independence of owning his own business. The training an individual receives in a franchise should help him or her avoid mistakes and generate more volume and profits. The success of the franchise owner is in the best interest of the franchisor. To work out if franchising in McDonald's was successful I went to many different franchises and discussed with them if their franchise was a successful franchise. I came up with a set of results and made the following pie-chart I thought this to be more visualising to notice the results. This is a pie chart which I created on Microsoft Excel. It shows that the majority, 94%, of the company's I spoke to trust that their franchise is very successful or believe it to be somewhat successful. Only 2% know that their franchised company is very unsuccessful. So I come to my conclusion to say that I believe franchising is a very successful way of enhancing your business. In order to be successful you must be willing to take risks. You would also need to have very good communication and leadership skills. There is a 94% chance of the franchise being a success, so it would be a very good decision to adopt a franchising business. ...read more.

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