1 / 12

BCEN 2900 Entrepreneurship

BCEN 2900 Entrepreneurship. Chapter 6 Franchising. Franchises . One firm already has a successful product or service Offers its trademarks and patented business processes to another for… Initial franchise fee and Ongoing royalties. Growth in Franchise Impact.

chase-mcbride
Download Presentation

BCEN 2900 Entrepreneurship

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. BCEN 2900Entrepreneurship Chapter 6 Franchising

  2. Franchises • One firm already has a successful product or service • Offers its trademarks and patented business processes to another for… • Initial franchise fee and • Ongoing royalties

  3. Growth in Franchise Impact Source: McGrow Consulting, www.mcgrow.com/growth.htm

  4. Entrepreneurs • Franchisees can be entrepreneurs • The ones opening the franchise in their local market • Franchisors can be entrepreneurs • Different role of being a manager of managers • EmbroidMe Franchise Video

  5. Three Types of Franchises • Trademark franchise • Franchisee can buy right to use trademarked business name – does not have to buy product from parent • Distribution Franchise • Use the trade name, sell the parents’ products exclusively • GM and Ford dealerships • Business Format Franchise • Formula for doing business • Training, support, advertising

  6. Franchise Agreements • Single unit agreements • Open one store • Area agreements • Open several stores in one area, up to a maximum • Master franchisee: Can also sell franchises to others in that area

  7. How to Get Started - Franchisor • Develop a business plan for the franchises. • Consult an attorney or consultant that specializes in franchising • Prepare your policies, advertising, strategy, and management • Start to recruit and help franchisees!

  8. Developing a Franchise • Franchise fee ($25,000-$100,000) • Capital Requirements • Land • Building • Inventory • Licenses • Royalty payment on gross income • Advertising fees (on top of your ads) • Other fees as agreed upon

  9. How to Get Started - Franchisee • Decide on a good franchise opportunity • Visit several outlets across its territory and talk • Visit an attorney • Check the franchise’s references • Uniform Franchise Offering Circular • Sign agreement and begin training • Start your business!

  10. Pros and Cons of Franchising • Pros • Training provided • Brand name recognition • Quality control • Proven business models • Site selection help • Cons • Fees for franchise • Required startup capital • Restrictions on management methods • Purchasing requirements

  11. Rules and Regulations • FDD (Franchise disclosure document) must be offered to potential franchisees to review • Dunkin Donuts FDD • Franchise agreements and documents must be attached to the circular as well • State laws for franchising apply as well • Beyond regulation: the ethics problems

  12. Food for Thought • Two People • Person A • Creative, spontaneous, thrives on adventure • Person B • Disciplined, structured, organized • Which of these would be best suited for a franchise? • Why?

More Related