The advantanges and disadvantages of Franchising.Discuss.

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Business assignment NO.1                                              Student’s Number: 6012950

          BUSINESS

   Assignment No.1

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Course: UFY

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     Table of Contents

  • Introduction…………………………3
  • Recommendation…………………..4
  • Important Findings………………….4
  • Conclusion…………………………..7
  • Bibliography…………………………7

Introduction

Franchising is a tried business concept and has proven to be a success, which could be regarded as one option to start our own new business. The franchise is one type of partnership between the franchisor and the franchisee based on a close dependence on each other. The franchisor wants to ensure that the franchisee’s business is launched successfully and stays profitable, whose income will rely on the franchisee’s success. The formal definition of franchise given by British Franchise Association (BFA) is: A franchise is a contractual license granted by person (the franchisor) to another (the franchisee) which:  permits or requires the franchisee to use a specified trademark; entitles the franchisor to exercise continuing control; obliges the franchisor to provide the franchisee with the assistance; requires the franchisee periodically pay to the franchisor. (Buying a Franchise, Phil Stone,2001).For instance, Molly Maid (the Cleaning Services), Kall-Kwik, Prontaprint ( Fast Print ),The Body Shop( Health & Beauty), Clips Away( Motoring Services), etc. In recent years, hotels and catering, personal services and store retailing have emerged as the largest sectors within the franchising industry. Figure 1 shows how the franchise industry is segregated in terms of business sector and is reproduced from the survey published by the BFA

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Figure1 Number of Franchisees in different sectors in 1998(BFA)

Recommendation

In this report the advantages and disadvantages of franchising from the perspectives of both the franchiser and franchisee will be indicated, which should be taken full consideration before purchasing a franchise. Other factors related to franchise will be illustrated at the end.

Important Findings

The Advantages of Franchising

There are obvious and clear benefits in buying a franchise, among which the most significant one is that, as already stated, we purchase a tried and proven business concept. Compared with the other new start-up business ...

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