Documenti di Didattica
Documenti di Professioni
Documenti di Cultura
UNIVERSITY OF MUMBAI
PROJECT ON
FRANCHISING
SUBMITTED BY
NIDHI MEHTA
PROJECT GUIDE
PROF. RAJWADE
SEMESTER V
(2009-10)
UNIVERSIT
Y OF MUMBAI
PROJECT ON
FRANCHISING
SUBMITTED BY
NIDHI MEHTA
PROJECT GUIDE
PROF. RAJWADE
SEMESTER V
(2009-10)
UNIVERSITY OF MUMBAI
PROJECT ON
FRANCHISING
Submitted
In Partial Fulfillment of the requirements
For the Award of the Degree of
Bachelor of Management
By
NIDHI MEHTA
PROJECT GUIDE
PROF. RAJWADE
SEMESTER V
(2009-10)
Declaration
Student’s Signature
Name of Student
FRANCHISING
C E R T I F I C A T E
Course Co-ordinator
Mrs. A. MARTINA
External Examiner
FRANCHISING
ACKNOWLEDGEMENTS
I would also like to thank Mr. Kalpesh Kothari who owns Archies Franchise for
taking his valuable time out and providing me with valuable inputs for the
project. Without his co-operation it would has been difficult to compile the
project.
I would also like to thank our co-ordinator Mrs. A. Martina and all those people
who have directly or indirectly contributed towards the compilation of this
project.
FRANCHISING
EXECUTIVE SUMMARY
SUMMARY:
The report contains an introduction to the concept of Franchising and the
various Franchising concepts that are involved in it.
The advantages, disadvantages, appeals and drawbacks of Franchising.
It has special mention general issues of the Franchising i.e. how to
investigate a franchise and how to select a franchisor?
It also has special mention of the Franchising Practices in India i.e. how it
evolved and the present stage.
How Location plays an important role while setting up a Franchisee
Chain.
The Marketing of the Franchise is studied using Philip Kotler’s 4 P’s.
It then goes on to study of success of franchises. It also analyses the scope
for growth of franchising in both Indian and International market.
FRANCHISING
Towards the end of the report the main problem that plague the industry
have been highlighted and recommendations given to try and do away with
the problems or at least reduce their intensity to a minimum.
Research Methodology
Sub objective
Indian Detail
Scenario
Broad objective Study
Of
What is Successful
franchising?
International Franchises
Scenario
WAL-MART
&
ARCHIES
Legalization
Interview
Retail Outlet Name Address Phone No
Archies Kalpesh Kothari Ghtakopar 9773716455
Monginis Sameer Shah Ghatkopar ------
Bata Subhash Agrawal Parel 24105091
FRANCHISING
A FINAL PROJECT ON
FRANCHISING
INDEX
3 Franchising in India 35
4 International Franchising 45
5 Legalization in Franchising 49
8 Evaluation of successful 59
franchises
9 Conclusion 77
FRANCHISING
INTRODUCTION
Franchising in general means granting of certain rights by one party (the franchisor) to
another (the franchisee) in return for a sum of money. The franchisee then exercises those
rights under the guidance of the franchisor. The above definition is a very general in its
nature and encompasses many different forms of licensing arrangements.
WHAT IS FRANCHISING?
FRANCHISING
Franchising has emerged as a very powerful means of distribution for goods and services.
The last 40 years have seen the evolution of different types of franchising. Of these, the
most common and prevalent type is “business format” franchising which adopts a more
holistic approach than simply “product” or “process” franchising.
A franchise is the agreement or license between two legally independent parties which
gives:
• A person or group of people (franchisee) the right to market a product or service using
the Trademark or trade name of another business (franchisor).
• The franchisee has the right to market a product or service using the operating methods
of the franchisor.
• The franchisee has the obligation to pay the franchisor fees for these rights.
• The franchisor has the obligation to provide rights and support to franchisees.
FRANCHISE AGREEMENT
FRANCHISOR FRANCHISEE
FRANCHISOR FRANCHISEE
Conceptual Framework
FRANCHISING
Who is a Franchisor?
He is the owner of the franchised system. It owns the know-how of the concept and the
brand name. It grants franchises to other parties.
1. Unit Franchisee.
This is the simplest and most common form of franchising. This franchisee is granted the
right to operate one unit or outlet of the franchised business.
2. Master Franchisee.
He is generally granted the right to a substantial territory. It will then grant unit franchises
to unit franchisees throughout the territory. The Master Franchisee needs to have
sufficient drive and resource to fully exploit the territory and control the unit franchisees
territory. McDonald’s, Pizza corner and Pizza Hut have adopted this system in India.
3. Regional Franchisee.
In a geographically large area a franchisor or a Master Franchisee may decide that it is
commercially appropriate to further divide the territory up with separate regions and
grant a Master Franchise for each separate region. These franchises are known as regional
franchises or sometimes Area franchises.
4. Multiple Franchises.
Some unit franchisees operate not just one unit, but several. These are referred to as
multiple franchises and usually have a large number of individual unit franchise
arrangements – one for each unit.
5. Developers.
FRANCHISING
Large Corporations sometimes prefer to exploit their territory by opening outlets
themselves. These are known as developers. They have a single developer agreement,
which allows them to open many units. These are pilot operations so that they become
fully familiar with the business at an operational level and can localize it so as to improve
its chances of success. Excel Info Tech has adopted this unique mode of franchising.
Franchise operations, as we know them, are not very old. The boom in franchising did not
take place until after World War II. Nevertheless, the essentials of modem franchising
date back to the Middle Ages when the Catholic Church made franchise-like agreements
with tax collectors, who retained a percentage of the money they collected and turned the
rest over to the church. The practice ended around 1562 but spread to other endeavors.
For example, in 17th century England franchisees were granted the right to sponsor
markets and fairs or operate ferries. There was little growth in franchising, though, until
the mid 19th century, when it appeared in the United States for the first time.
The Singer Company implemented a franchising plan in the 1850s to distribute its
sewing machines. The operation failed, though, because the company did not earn much
money even though the machines sold well. The dealers, who had exclusive rights to their
territories, absorbed most of the profits because of deep discounts. Some failed to push
Singer products, so competitors were able to outsell the company. Under the existing
contract, Singer could neither withdraw rights granted to franchisees nor send in its own
salaried representatives. So, the company started repurchasing the rights it had sold. The
experiment proved to be a failure. That may have been one of the first times a franchisor
failed, but it was by no means the last. Fortunately, the Singer venture did not put an end
to franchising.
Other companies tried franchising in one form or another after the Singer experience.
One of the first successful American franchising operations was started by an enterprising
druggist named John S. Pemberton. In 1886, he invented a beverage comprising sugar,
molasses, spices, and cocaine (which is no longer an ingredient). Pemberton licensed
selected people to bottle and sell the drink, which is now known as Coca-Cola. His was
one of the earliest—and most successful—franchising operations in the United States.
For example, several decades later, General Motors Corporation established a
somewhat successful franchising operation in order to raise capital. Perhaps the father of
modern franchising, though, is David Liggett. In 1902, Liggett invited a group of
druggists to join a "drug cooperative."
FRANCHISING
His idea was to market private label products. About 40 druggists pooled Rs.1,92,000
($4,000) of their own money and adopted the name "Rexall." Sales soared, and "Rexall"
became a franchisor. The chain's success set a pattern for other franchisors to follow.
It was not until the 1960s and 1970s that people began to take a close look at the
attractiveness of franchising. The concept intrigued people with entrepreneurial spirit.
However, there were serious pitfalls for investors, which almost ended the practice before
it became truly popular.
Since there was no regulation of franchises to speak of, a number of hucksters involved
themselves in the field. Many of them initiated get-rich-quick schemes which cost
investors countless dollars. As a result, franchising became a bad word to some people. In
1970 alone, over 100 franchisors went out of business. Concurrently, thousands of
franchisees lost their businesses and their money.
TYPES OF FRANCHISES
FRANCHISOR
FRANCHISE FRANCHISE
E E
The success stories of franchising are endless. McDonald’s, Jumbo King, Kentucky Fried
Chicken, Archies, Monginis, Cafe Coffee Day are only a few of the more famous
examples where franchising has proved successful.
Today even couriers, doctors, opticians, law firms, accountants and many other types of
operations are profiting from the business expansion undertaken via the franchise
method.
Any product that can leverage a network of outlet to reach out to more customers in wide
geographical regions is suitable for franchising.
The franchising is clearly responsible for the success or failure of the product and for the
viability of the franchise outlets. The franchisor has to understand the essence of
franchising, and has to develop an appropriate business format for the franchising of the
product. For this, it is necessary to understand the critical success factor i.e. “elements” of
franchising.
FRANCHISING
The figure given below shows the ‘environment’ in which franchising operates.
The franchisor and the franchisee are bound together by the system, which ensures that
the customer gets the product or service as promised to him by the brand name and its
associated brand promise.
In a franchising environment the franchisor defines the product specifications as per the
needs and expectations of the customer. The system ensures that the right product with
the right quality reaches the customer at the right place, right time and right price.
Market Market
Customer
Product/
service
Franchisee
System/
Brand Know-how Brand
Franchisor
1. Product
Before the franchising of a product can be planned, it should have been successfully
tested in the marketplace. A tasted product is different from a test-marketed product.
Many companies make the mistake of getting their products test-marketed in controlled
conditions using the services of marketing agencies and after obtaining positive results,
start franchising the product aggressively. This can lead to disastrous results when the
product is introduced in real-life situations.
Testing a product means that it has to be successfully sold in the market place, preferably
through multiple outlets or units, and in different geographical markets. Successful
selling also implies a body of satisfied customers who have actually returned for a repeat
purchase.
Product management is one of the element of framework for franchising. The production
and operations can be handled entirely at franchisor’s end or at the franchisee’s unit or
partly at both depending upon the nature of the product. The actual sales transactions and
after-sales services have to take place at the franchisee outlet. This is the common feature
of all franchise operations. These aspects of product management are shown
diagrammatically in the figure given below.
FRANCHISING
Market Franchisee
Feedback
Product
Complaints/
Updates
Feedback
Production
Sales
Product
Franchisor
Product Management
2. Branding
The product offered in the market has to be backed by a proper marketing strategy with a
strong brand image that the market associates with the features and benefits of the
product or with the company offering it. But the brand can be built gradually through the
combined promotion efforts of both the franchisor and franchisee. The franchisee,
however, expects the franchisor to have strong brand at the outset, which will ensure the
success of the product. If the brand image is weak, the franchisee will not pay much for
buying the rights to use the brand name.
Branding is essential for the success of franchising. The stronger the brand, the easier it is
to get franchisees for it as also an appropriate value for the franchise. Managing brand
involves creating positioning and spreading the brand.
The figure given below outlines the entire process. Expansion through the openings of
new outlets, which is the franchisor’s role, results in improving the brand reach.
Feedback from the market offers the franchisor inputs to help modify communication
about the product, thus fine-tuning the brand and its image.
The franchise system has to clear the issue of brand management in order to avoid future
conflicts. Some franchisors assign a fixed amount for brand promotion in their budgets
FRANCHISING
every year. Other franchisors, however, make it clear that all promotion and sales
activities are the responsibility of the franchisee at the later units level. But it is important
to define these aspects clearly in the franchising offer document.
Brand Management
3. Franchising system
The system, which forms the third element of franchising, is a combination of the
accounting system, the feedback and control system and the know-how transfer system.
This is outlined in the figure given below. The collection of payments from the customer
and payment of royalty by the franchisee, backed by a proper financial control
mechanism, forms the backbone of the accounting and financial management system.
The transfer of know-how, product, service, material and training from the franchisor to
the franchisee is another aspect that requires attention. For the franchisor, a feedback
system for quality control and customer complaints, can offer an important insight into
the functioning of the product, the franchisee outlet and the entire franchising system.
FRANCHISING
Raw Raw
Materials Materials
Product/Service Product
Know-how Sale/
Service
Royalty Delivery
The System
The three elements of the product, branding and the system integrate together to form the
franchising framework. The franchising framework is depicted in the figure back.
The franchisor invests in R&D, marketing (brand building) and is responsible for
quality/operations control and expansion. The franchisee sells and delivers the product to
FRANCHISING
the customer and provides after-sales service. The franchisee invests in the outlet
including manpower and equipment.
The system ensures that there is a flow of royalty and feedback to the franchisor. It also
ensures that the franchisee receives the product, know-how and training. The system
incorporates control and mechanisms and feedback systems to allow the franchisor to
monitor the later.
The franchisor has to define all the parameters mentioned in the framework so that the
three elements if franchising take shape. By defining these parameters, the franchisor is
able to prepare an offer document that can form the basis of the understanding between
the franchisor and the franchisee.
FRANCHISING
Brand Image
Feedback
Customer
Product/Service Payment
Franchisee
Investment- Men, Machine,
Capital
Franchisor
Quality/
Research &
Operations Expansion
Development Marketing
control
PARTS OF FRANCHISING
Realism
Research
1. Realism:
The franchisee should be very realistic in assessment of his business strengths and
weaknesses. Certain key areas where realism is a must while deciding to go into
franchising includes questions like are you prepared for the financial insecurity, are
FRANCHISING
you capable of developing a frame of mind when you can smile and be cordial even
when the customer is totally wrong. More important is the need for realism in
evaluating the products and services offered by the franchisor.
2. Resources:
Many franchisees, during the early periods of their business when resources constraints
are common, tend to sometimes overlook sending in the royalty cheques to the
franchisor. Franchisors keep feeling and rightly so that their royalty is as much a key
business expenditure of the franchisee as payment for purchases or payroll is and any
delay in handling this area would lead to unfortunate consequences of a long term
nature. Therefore, while planning resources on a periodic basis, consider the payments
that are to be made to franchisor. Another area where most franchisees have problems
is to manage their resources while living within the franchising system. The
franchising agreement, in most cases, clearly indicates systems, procedures and
methods of managing the resources. The franchisee will do well to either be mentally
prepared to accept the resource management terms of the franchisor or make it clear at
the beginning that he needs the requisite flexibility to manage his own resources.
3. Research:
Research on the franchisor is a must for the success. Various published sources also
provide fairly detailed information on most of the franchises that are on offer but to
what extent that will be adequate for the Indian conditions needs serious examination.
Whatever be the methodology, the prospective franchisee will do well to build
comprehensive information on the franchisor, the products or service of offer,
competing and substitute products and services before he makes any move committing
his financial resources on a long term basis.
4. Resolve:
Resolve to be part of the franchising system. The problem starts when a person gets
into franchising only because he has an entrepreneurial instinct but the instant he
FRANCHISING
becomes a franchisee, the true entrepreneur in him starts resenting the shackles that are
imposed by the franchising system. The options are clear–either stays within the
system and fully learns the nuance of the business and prospers or tries one’s fledging
entrepreneurial talent and get into trouble.
Finalization of agreements:
Once a particular franchise opportunity is selected, a consultant can explain to you your
rights and obligations under the franchise agreement. You should understand that your
consultant has limited ability to “negotiate” the deal on your behalf, unlike other types of
business transactions. Most franchise offerings, particularly in established franchise
systems, are offered virtually on a “take it or leave it” basis. This is due to a natural
reluctance to negotiate, a desire for uniformity, the franchisor’s obligation to disclose the
franchise terms (stating whether such terms are negotiable or non-negotiable) to all
prospective franchisees.
Incorporation:
While a sole proprietorship is the simplest form of ownership, a sole proprietor has his or
her personal assets at risk for any liability in connection with the operation of the
franchised business. In a partnership the partners are jointly and individually liable for the
liabilities of the partnership and for the actions of the other partners acting within the
scope of the partnership. With a corporation, a shareholder generally will not be liable for
the liabilities of the corporation except to the extent of the shareholder’s capital
contribution. A shareholder’s personal assets are protected.
Franchisor:
FRANCHISING
The Franchisor provides a ready made, established and tested business format
including brand name, proven and time tested products, corporate power, know-
how, training and supports systems.
The Franchisor provides complete assistance in terms of site selection of the
business, personal training, business setup, advertising and product supply.
The Franchisor also provides manuals, literature, etc. to help the franchisee to
follow all necessary policies and practices as prescribed by the franchisor.
Franchisee:
Buys licensed rights to the whole business package from the Franchisor in a specific
territory for a specific period.
Invests in capital, time, effort and any relevant past experience to create his business,
replicated from the Franchisor’s business system.
Moreover the franchisee manages the store and the business and generates revenues
that are ultimately shared between the Franchisor and franchisee.
Brand name protection: The franchisee is obliged to protect and promote the brand
name of the Franchisor. The Brand name or the trademark should not be changed or
damaged by the franchisee nor any derivatives of it formed in the name of the
franchisee.
Secrecy: The know-how, system, methods and all other information provided in the
manuals and future updates should not be divulged to any third party. The franchisees
should be asked not to copy the manuals in any part.
Taxes: If the franchisee is supposed to comply with local tax statutes like sales tax,
VAT, service tax, etc. the same should be specified and the franchisee should be
obliged to comply with them and provide the relevant financial information to the
statutory bodies and to the Franchisor.
For the services provided by the Franchisor, the franchisee has to pay an upfront
“franchisee fees” and an on-going royalty or profit sharing.
WHY FRANCHISING?
Franchising is upcoming because of the various reasons given below:
The global franchising revolution:
The global franchise economy accounts for 20 percent of the business around the
world, employing 27 millions people. It has been a very successful mode of
expanding business without large investment and with the minimum risk possible.
Availability:
The customer demand for the product or services has to be met, thus a wide
distribution is necessary. The most effective way to expansion is through franchising.
This is not only cost-effective but also guarantees a number of outlets without the
direct headache of running them.
Brand Visibility:
It has now become important for a brand name to be present everywhere if it has to
survive, since brand recognition is what is required and what matters. Franchising is
the best way to have larger visibility coupled with best possible service as it is
combining the brand name, know-how, technology, etc. of the franchisor with the
capabilities and hard work of the franchisee. In the present age, with people seeking
immediate recognition, small businesses alternative to franchising which in turn helps
the company to expand its reach.
Thus it can be said that Franchising is an ideal business model to expand the reach of the
business and satisfy the needs of the customer.
FRANCHISE APPEAL
FRANCHISING
There are two primary reasons for the tremendous success of franchising as a method of
marketing goods and services.
The Franchisor shares risks with the franchisee. Also a part of the investment is
sharing the risks put in by the Franchisee who is an important source of capital for the
Franchisor.
Thus a company can establish several outlets quickly in researched areas and expect a
uniform standard of service to customers from its franchisees.
Minimum Risks:
The risks reduced to a minimum as the Franchisor supports the franchisee by
providing training, know-how, business processes, advertising, etc. through
franchising, the franchisee ca count on the experience and support of the Franchisor
and thereby reduce the risk of failure that comes as a result of financial
mismanagement and inexperience with business management, which are the cause of
more than 90% of all business failures.
Synergy of operations:
Due to the presence of a number of franchisees in the network, the per-unit cost is kept
to a minimum. Thus the franchisee spends less on advertising and promotion.
Economies of scales:
The franchisee is able to leverage the economies of scale a large organization would
enjoy and saves a substantial amount on material, equipment, overheads, etc.
Entrepreneurship:
FRANCHISING
Franchising provides an opportunity to start a business without having a great amount
of risk. It allows people to be their own boss and provides them with a successful
model which they can follow and reap rich rewards.
Drawback of franchising
FRANCHISING
♦Lack of independence:
An important feature of franchising is that every aspect of the business format is defined
and each outlet is operated strictly in agreement with this format.
Discipline:
Being a franchisee means working within a system in which there is little freedom or
scope to be creative. Almost every aspect of operating the business is laid down in the
manuals.
Franchisor Monitoring:
Regular field staffs monitoring visits are necessary but may seem as an intrusion at
later stages.
Services Charges:
At first these services are necessary to set up and settle into the business and
franchisees may not mind paying them. However as time goes on, if less use is made
of the Franchisees resent making the continuing payments.
Reputation:
Each franchisee affects reputation of the whole system depending on their
performance and ability. In many franchises there is a wide gulf in the quality of
product and services between the best and the worst franchisees. Thus a bad franchisee
can harm the reputation of other outlets in the chain.
FRANCHISING
♦ Inflexibility:
Candidate Evaluation
♦ Carefully study and obtain professional advice concerning the franchisor’s and
franchise agreement, paying special attention to:
Costs
Term (duration of) agreement and renewal provisions and conditions
Termination clauses
Franchise territory
Procedures and restrictions
Training and assistance
Earnings potential - gross sales, net profit
Expansion plans
How fast do they plan to grow
Where do they plan to grow?
Do they have a business plan for your area of location?
What is their analysis of the competition in your area?
How many units are being planned for your area? Why that many?
How much is going to be spent in regional advertising in your area?
♦ Go to work in an existing franchise for a couple of weeks and get to know the:
System
Manuals
Training program
Support
Earnings potential
Before buying any business, you must carefully consider many factors that
are critical to your success:
Costs
How much money will this franchise cost before it becomes profitable?
Can I afford to buy this franchise?
Can I make enough money to make the investment worth my time and
energy?
Your Abilities
Do you have the technical skills or experience to manage the franchise?
Do you have the business skills to manage the franchise?
Demand
Is there enough demand in your area for the franchisor’s products or
services?
Is the demand year-long or seasonal?
Will the demand grow in the future?
Does the product or service generate repeat business?
Competition
How much competition do you have, including other franchisees?
Are the competing companies/franchises well established?
FRANCHISING
Do they offer the same products and services at the same or lower prices?
Is there a specialty or niche you can capture?
Brand Name
How well known is the franchise name?
Does it have a reputation for quality?
Have any consumers filed complaints with the local Better Business Bureau?
Franchisor’s Experience
Has the franchisor been in business long enough to have established the type
of business strength you are seeking?
Expansion Plans
Is the franchisor planning to grow at a rate that is sustainable?
FRANCHISING
The franchisor’s job is to market the franchise proposal and attract the right potential
franchisees. The marketing of the franchise can best be understood by starting from the
basics Philip Kotler’s four P’s of marketing, viz. the product, price, promotion and place,
can be used as a starting point to devise marketing plan for selling a franchise. The four
P’s are discussed in detail below:
PRODUCT
The “product” includes the actual product, the franchise package, the franchise unit and
the brand associate with the product. The product and he franchise package should both
be attractive to a potential franchisee, who should also be convinced that investing in the
product will give him adequate returns. In businesses where the product is a service, the
franchisor has to lay down the procedures and guidelines for the execution of the service
in the form of manuals. These manuals, along with the equipment needed to render the
service, in effect, become the “product” which the franchisees sees, as they represent the
know-how and the product or service specifications that the franchisor is transferring to
the franchisee.
PRICE
The price of a franchise implies the franchise fees that franchisee is being charged the
franchise fees is a one-time payment that a franchisee makes to the franchisor in the form
of start-up fees. Additionally the franchisor charges royalty, collected in the form of
FRANCHISING
ongoing fees, on the basis of the business that is generated by each franchise unit.
PROMOTION
The franchise proposition has to be promoted in order to generate potential franchisee
inquiries. How, then, does a franchisor actually find potential franchisees for his product?
As for any other product, potential inquiries can be generated by one or more of the
following ways:
Advertising
Direct marketing or
Word-of-mouth
In each of the above, the first step is to define a typical or ideal franchisee. For example,
for NIIT franchise, the franchisee who possesses the technical skills or experience in the
relevant field, has a higher chance of succeeding in business than a
non-technical person.
The next step for the franchisor is to draw up the profile of an ideal franchisee ideally
fitting the concerned business and industry. A strategy for advertising and/ or direct
marketing which directly targets this qualified segment, can then be worked out.
PLACE
FRANCHISING
The fourth ‘P’ of marketing, place refers to the location of the franchise unit. A study of
the demographics of the location and measure the estimation of the demand for the
product can be done. Most importantly, the location should not be too close to an already
existing franchise unit. A market feasibility study should be used to assess the
practicability of a franchise unit at that location. Examples: Franchises like Monginis,
Archies are located near station where as McDonald outlets are located in malls.
Franchising as a way of doing business started in Europe in the 12th century. Business format
franchising the most popular method of franchising started in the U.S.A. in the 1950’s.
Franchising provided a quick way to rapidly expand service-based industries across the
country. India today is the second largest franchise marketplace, thanks to its size and the
recent positioning of the economy.
In India, franchising as a concept was unheard of till late 1980’s.the distribution industry was
used to the dealers and retailers, both exclusive and non-exclusive. However, due to the
growth of competition and increasing importance to meeting the needs of the customers, an
alternative had to be found.
Thus was felt the need for solution that had a right mix of independence and interdependence.
This scenario led to the emergence of franchising.
In franchising, the businessman becomes a part of the system under which the Franchisor
allows him (the franchisee) to market products or services, along with the Franchisor’s brand
name, goodwill and marketing paradigms. The franchising can also use the Franchisor’s
FRANCHISING
intellectual property rights such as know-how, designs, trademark, patents and even trade
secrets. In return, the franchisee agrees to pay a negotiated sum of money.
“It is a win-win situation for both”, says marketing writer Sheetal Talreja. “It frees the
Franchisor from all the hassles and nitty-gritty of day to day management, while still
preserving and strengthening his Unique Selling Proposition. And the Franchisee is saved
from the uncertainties of building up a business brand and from the Franchisor’s well-
developed marketing practices.”
Considering the enormous success of this model on the west it is necessary that we interpret
the concept as they do worldwide give and make a few changes as aping the west blindly
might not work.
Developing market growing at a fast pace: India has a population of over a billion
people and is a very large market, whose potential is still not tapped to its maximum.
Magic of the middle class: There is a growing middle class population with a growing
purchasing power who are looking for branded and high quality goods and services to
fulfill their needs and changing lifestyles.
The scenario:
The international franchising concept is relatively new in India and it is only since the
early 90’s that the U.S.A. and third-county franchising companies have entered the market.
Franchising in India is currently regarded as a form of marketing arrangement rather than
an industry by itself.
Some of the franchising systems that have been adopted by companies in India to expand
are:
1. Master Franchising System: In master franchising the Franchisor grants for a
particular area to the master Franchisor for a front-end master franchisee fee. The
FRANCHISING
master Franchisor on his part is responsible for appointing further individual
franchisees within that area.
It is in this context that the Indo American Chamber of Commerce, supported actively by
the United States Foreign Commercial Service in India and backed by a group of high
repute professionals with extensive experience in the fields of franchising, took the
initiative about a year ago to form The Franchising Association of India (FAI) to
provide a forum for Franchisors, franchisees and other related interests, to promote the
concept of franchising.
FAI has since been incorporated as an Association under the Companies Act and after
meeting the rigorous criteria has also been admitted as a member of the prestigious
World Franchising Council (WFC).
FAI is, thus, the only and exclusive body, which will henceforth represent the interests of
all concerned with franchising in India at the national and the international level.
Membership of WFC also helps to provide FAI with strong contacts to the Franchising
Association of other countries including the International Franchising Association in the
United States. All these linkages will clearly help to connect the Indian entrepreneurs
with the enormous increase in opportunities for franchise businesses available all over the
world.
The objectives of the Franchising Association of India are:
Encourage and safeguard the business environment for franchising, both with regard
FRANCHISING
to Franchisors and Franchisees.
Act as a resource centers for current and prospective Franchisors and franchisees, the
media and the Government.
Disseminate knowledge to promote the concept of franchising and to propagate it as a
healthy business practice.
Establish a forum for discussion and deliberation on franchise-related matters and
problems and help promote the interest of members by organizing seminars, conferences and
meetings.
India’s training and industrial history has generated a whole sector of potential self-
employed people. Many are the descendents of those involved with distributorships,
agencies and joint ventures partnership. Many are trained professionals in marketing,
customer service, and working with dedication to formal business formats.
These traits make them the ideal candidates for successful franchisees.
Thus a presence of ample entrepreneurial talent is waiting to be exploited.
In the beginning of the 1980’s, the sectors ideally suited for harnessing the ample
entrepreneurial talent within the country like bottlers, computer education (NIIT, Aptech,
Boston’s), shoes were into franchising.
Thereafter franchising soon gained momentum because of the right environment for
franchising:
Vast geographical spread,
FRANCHISING
Availability of finance,
Local market various in terms of language culture and habits.
India is so large and diverse that franchising is the only viable alternative for retail
operation that want to expand their reach quickly and cost-effectively.
Price Sensitivity:
Indian customers are highly price sensitive and want the greatest value for money, thus
Franchisors need to keep the cost factor in mind when franchising.
Specialization:
Indians prefer certain kinds of goods to be tailored to their requirements. And a perfect
example for this would be McDonald’s which had to Indianise its burgers to increase sales.
They launch McAloo Tikki for Indian customers. Thus franchising must provide a proven
format but at the same time allow flexibility to the franchisee to alter the offering slightly to
appeal to the customers.
Management :
Indians have certain traits like:
1. Ability to provide excellent customer service.
2. Working to a given business format.
FRANCHISING
3. Ability to work hard and sell the concept they believe in.
4. Understanding the pulse of customers.
5. Quick responses to local needs.
This helps in managing the showrooms of the franchisees easier and a lot safer.
Though the Franchising in India is at a very nascent stage, but this industry has clocked
the growth rate of 25-30 per cent, the second fastest growing industry. Franchising, as a
dynamic and ever changing industry will firmly establish itself in a couple of years.
Organized retailing though only at 6 per cent of the retailing, will take off in a very big
way. The Indian middle class is slowly expanding and now buys consumer appliances
with more disposable income. India offers lot of potential for the franchising community.
Apart from Indians being very entrepreneurial, franchising as a way of doing business has
been well accepted.
Cultural Empathy:
Franchising well suits the entrepreneurial side of Indian culture. Indian business people
are fiercely proprietary and feel a need to have ownership and control over their
business operations which they can pass on to future generations. However, at the
same time they are keen to benefit from the goodwill and technology that can be
provided by the foreign franchisor. Franchising allows them to reconcile these
conflicting ambitions.
Customization:
Customization is very important when it comes to Indian customers. This
customization not only takes place in systems but also in the main products and
services. That’s the reason why one walks into the western McDonald’s and is able to
order a McAloo-Tikki Burger.
In a vast country like India with over 1 billion population and rapidly changing life styles
and growing awareness in the consuming class wanting continuous improvement in the
quality of products and services the scope for growth of franchising is phenomenal.
Going forward this growth is inevitable not only through Foreign Franchisors coming
into the country but more so through the growth of large number of Indian Franchise
Systems like Aptech, NIIT, Barista, Raymond and a host of other emerging Franchise
businesses in the area of health care, entertainment , beauty parlours, education, business
services and the like.
Considering that there is no dearth of entrepreneurial talent in the country and that there
are scores of Indian Franchisors looking out for suitable Franchisees this sector is set to
explode to a level of over 2500 Franchise system in the next 4/5 years with over 1,00,000
Franchisees operating all over the country with its corresponding positive impact on
employment generation.
The future of the franchising industry in India seems to be bright but will be difficult to
FRANCHISING
sustain without constant innovation.
The sectors in which Franchising is making rapid strides are Education, Specialty-
retailing, Apparel retailing, Food and Beverages, Health care and Beauty.
Co-branding:
In franchising, the concept of co-branding simply involves two or more “brands”
sharing real estate. Each maintains identity, but there is free flow of customers
between them. Co-branding saves operating costs and lures more customers to the
site. However this is a phenomenon of matured franchising markets and once most
of the franchisors have explored all new entries in India they will probably shift
their focus to this system of delivery.
Example: Shoppers Stop has tied up with Planet M to sell their products within
shop, thus sharing space and creating a pull for customers as two big brands at
present at the same location.
INTERNATIOANL FRANCHISING
However, there are other important factors, also called market attractiveness factors that
draw franchisors to certain markets, such as the types of franchise regulations in place in
the region and the structure of the target market. When a franchisor engages in market
FRANCHISING
selection, they will heavily evaluate the market potential and legal environment. Once the
franchisor selects their market, they will begin recruiting franchisees to help run the
expanded operations.
Interactions between the franchisor and franchisee are particularly important, and in
choosing a franchisee, the franchisor must consider how their partner will fit into the
overall strategy of the organization, how that particular country’s market will perform
and whether or not the franchisee is qualified to become a franchise partner. Franchisors
tend to choose franchisees that understand the brand, have specific expertise and business
acumen and have extensive knowledge of the local market.
Franchisees are drawn to franchisors that are aware of the local environment and status of
the market, and are willing and able to communicate openly with the franchisee. Besides
these tangible criteria, the franchise partners must have chemistry in order to successfully
form their partnership.
An example of an organization that has implemented these market and partner selection
techniques is Holiday Inn, whose “global ambitions” have led to localized, customized
hotel franchises all over the world, in Europe, the Middle East and Africa. Although it
remains to be seen how successful Holiday Inn’s expansion efforts will be, their
willingness to cater to the local market in their international expansion efforts should
serve them well.
FRANCHISING
1) Direct Franchising:
A very important question is clearly that of the choice of law and jurisdiction. There is
a tendency for franchisors to want their own domestic law to apply to the agreement,
even if the franchise is exploited in another country. Another vital point to be kept in
mind is the law relating to transfer of technology that may be applicable. Keeping the
above problems in mind, it is observed that direct franchising is not used extensively
internationally.
In this case, there are two agreements involved: an international agreement between
the franchisor and the sub-franchisor (the master franchise agreement) and a national
franchise agreement between the sub-franchisor and each of the sub-franchisees (the
sub-franchise agreement). The franchisor transmits all its rights and duties to the sub-
franchisor, who will be in charge of the enforcement of the sub-franchise agreement
and of the general development and working of the network in that country. All the
franchisor will be able to do is to sue the sub-franchisor in case of breach of obligation
to enforce the sub-franchise agreement as laid down in the master franchise agreement.
The advantages of this system are that the sub-franchisor is familiar with the local
habits, tastes, culture and laws of its country and that it will know ways about the local
government for necessary permits as and when necessary.
The disadvantages include that the financial returns of the franchisor will be reduced
by the amount due to the sub-franchisor and also that the franchisor will have to rely
on the sub-franchisor for the performance of the franchise system.
FRANCHISING
5) Joint Ventures:
In the case of joint ventures, the franchisor and a local partner create a joint venture.
This venture then enters into a master franchise agreement with the franchisor, and
proceeds to open franchise outlets and to grant sub-franchises just as a normal sub-
franchisor would do. An arrangement such as this will have to consider legislation on
joint ventures in addition to all the other legalities that are involved. Problems may
also arise with the fact that the double link may create conflicts of interest for the
franchisor.
The advantages accruing from this arrangement may include that it could be a way to
solve the problem of financing franchise operations in countries where financial means
are scarce.
6) Miscellaneous forms:
There is no limit to the refinement that can be made to the above forms of franchising
to accommodate the differing demands of potential franchisor and / or franchisee. New
forms of franchising, or combinations of different forms of franchising, appear at
regular intervals. Examples of these are stated as follows:
Multi-unit Franchising
Affiliation or conversion Franchising
Franchise within a Franchise
Subordinated Equity Arrangements
Management Agreement
Franchise Buy-ins
FRANCHISING
Consumer Protection:
It is anticipated that consumer protection laws could have a substantial impact on the
development of franchising in India. As discussed earlier, one of the great strengths of
franchising is that although the franchise network is comprised of independent
entrepreneurs each having entered into a franchise agreement, they all present a common
face to the public who should not be able to distinguish between corporate or franchised
outlets. The franchisee uses the franchisor’s brand name or goodwill, in relation to the
goods he sells or services he offers to the public, thereby representing that the goods or
services are of the same quality or standard as that of the franchisor.
If the consumer finds that it has paid a high price and chosen the particular brand of
goods or a particular agency due to its international reputation, but does not receive the
same quality of goods and services, then it must have a remedy. Also when the product of
the franchise causes injury to the persons who are the consumer of the products or causes
damage to the property of the consumer, then who should be held responsible?
Consumer Protection Law in India
Consumer Protection Act 1986 is the most relevant to the common man who is the
consumer of the franchised product. This Act covers a wide range of persons who may be
liable including manufacturers, assemblers, distributors, wholesalers, retailers and
packers. It may extend to installers, erectors and repairers of goods. Therefore, the
franchisor or franchisee of goods can fall into this category quite easily. At present there
is no provision for disputes arising specifically out of franchising in relation to consumer
FRANCHISING
protection, however the general law and statutes present can provide some relief to the
consumer.
In India, the Intellectual Property Laws have been in existence for long, but its
implementation has been developing only in the recent years with considerable
interaction with foreign businesses in relation to collaborations, technology transfers and
trade.
Indian Law on Intellectual Property rights:
There are various remedies available in India both under Statute and Common Law in
relation to trademark, design and copyright, which are particularly effective against
infringement and trafficking in trademarks. The Trademarks Act, 1999, which came into
force subsequent to the amendment of Trademarks and Merchandise Act, 1958, was
enacted to provide for the registration and better protection of trademarks and for the
prevention of the use of fraudulent marks on merchandise.
One of the ways for a franchisor to protect a trademark in India is by registration. The
Designs Act 1911 is aimed at protecting the proprietors of novel or original designs and
for enforcing those rights against infringers. It helps the franchisor to protect his exact
design and maintenance of his goodwill, which is the whole basis of the existence of the
franchise system.
The issue of copyright arises in franchise when a franchisor wishes to protect his
franchising manual, which contains the entire technique of running the franchise business
from being used improperly by another. Furthermore, the franchisor may have videos on
how to use the product and for advertisements that need to be protected from being
pirated. Keeping such questions in mind, Copyrights Act, 1957 has been enacted and
gives protection to the franchisor against the above apprehensions.
FRANCHISING
Although the general picture of franchising is one of success, there have been cases of
insolvency among the franchisees and franchisors. Insolvency becomes an issue if either the
franchisor or one of the franchisees becomes unable to pay its debts as and when they fall
due. Clearly, the risk of insolvency for both franchisor and franchisee in India will be greatly
FRANCHISING
increased if the franchise concept is a foreign one and it has not been properly adopted for
the Indian market.
Taxation Aspect
Taxation is another issue which receives due consideration. It is important to know the
local sales tax, property tax, and withholding tax applicable in a certain area.
FRANCHISING
Furthermore, how the franchise arrangement is structured and the existence of treaties
between the countries involved may have considerable influence on taxation.
The situations and types of taxes that apply to franchising in India are described
below:
Income Tax act, 1961
Companies Act, 1956.
TERMINATION OF FRANCHISES
Commercial Issues:
The prospect of terminating a franchise agreement with a Master Franchisee, developer
or franchisee raises a question of what is to happen to the franchise in the territory
following the termination. The answer will inevitably depend on the value and potential
value of the market. If the territory has a number of profitable outlets ‘up and running’, it
will usually allow them to continue. One way of achieving this is to terminate the Master
Franchisee’s right to open new outlets.
If full termination is the only possibility, the choices for the franchisor are:
Pulling out of the territory
Stepping into the master franchisee’s shoes
Appointing a new master franchisee for the whole territory.
FRANCHISING
Legal Issues:
The whole question of jurisdiction and conflict of laws is absolutely vital for the
draftsman to consider when contemplating what may occur in the case of termination.
Termination is generally resulted from breach of the franchising agreement. In such
cases, the grounds are quite reasonable and, provided the obligation of notice being
served is duly complied with, termination is set in action.
PROBLEMS
Franchisor’s Franchisee’s
Problems Problems
RECOMMENDATIONS
WAL-MART
SUCCESS STORY:
Wal-Mart has achieved its present success because of a history of never being satisfied
with the way things are. Wal-Mart as a Company is a visionary Company that learns from
and cherishes its past, but does not live in it. Here are a few brief highlights of the
greatest Retail Company ever. These highlights are intended to show you how Mr. Sam
Walton’s vision from a few years ago has grown a vision that now includes you as a new
Associate.
Many trace discount retailing birth to 1962, the first year of operation for Kmart, Target
and Wal-Mart. But by that time, Sam Walton's tiny chain of variety stores in Arkansas
and Kansas was already facing competition from regional discount chains. Sam traveled
the country to study this radical, new retailing concept and was convinced it was the
FRANCHISING
wave of the future. He and his wife, Helen, put up 95 percent of the money for the first
Wal-Mart store in Rogers, Arkansas, borrowing heavily on Sam's vision that the
American consumer was shifting to a different type of general store.
Today, Sam's gamble is a global company with more than 1.3 million associates
worldwide and nearly 5,000 stores and wholesale clubs across 10 countries. In the 1980s,
Wal-Mart became one of the most successful retailers in America. Sales grew to Rs.1,248
billion ($26 billion) by 1989, compared to Rs.48 billion ($1 billion) in 1980. Employment
increased tenfold. At the end of the decade there were nearly 1,400 stores. Wal-Mart
Stores, Inc. branched out into warehouse clubs with the first SAM'S Club in 1983.
The first Super center, featuring a complete grocery department along with the 36
departments of general merchandise, opened in 1988. Wal-Mart had become a textbook
example of managing rapid growth without losing sight of a company's basic values. In
Wal-Mart's case, the basic value was, and is, customer service.
Wal-Mart Stores, Inc. is the world's largest retailer, with $244.5 billion in sales in the
fiscal year ending Jan. 31, 2003. The company employs more than 1.3 million associates
worldwide through more than 3,200 facilities in the United States and more than 1,100
units in Mexico, Puerto Rico, Canada, Argentina, Brazil, China, Korea, Germany and the
United Kingdom. More than 100 million customers per week visit Wal-Mart stores
worldwide.
Guided by founder Sam Walton's passion for customer satisfaction and "Every Day Low
Prices,"
ARGENTINA
BRAZIL
CANADA
CHINA
GERMANY
JAPAN
KOREA
MEXICO
PUERTO RICO
UK
WAL-MART OPTICAL
The Wal-Mart Optical Department is one of the fastest growing areas in the company
and provides customers with superior goods and services at low prices you can afford.
They have always pride ourselves on 100 percent customer satisfaction. We'll work
tirelessly to continue meeting your needs by providing Superior Vision with Outstanding
Values for your entire family.
Today, they have many qualified Opticians and Professionals working in Wal-Mart and
in SAM'S CLUB Optical with a wide range of advancement opportunities across the
country. Eye exams are available by an Independent Doctor of Optometry, located next
to or inside Wal-Mart Vision Centers and SAM'S CLUB Optical. The Wal-Mart Optical
Department - seeing into the future with you in mind.
WAL-MART VACATIONS
Wal-Mart Vacations offers "Always Low Prices" on cruises, vacation packages, car
rental and hotel discounts, this is another important category of wal-mart specialty
division.
WAL-MART PHARMACY
The Wal-Mart Pharmacy is a logical extension of the cherished company philosophy:
customers deserve superior goods and services at fair and honest prices. Today, more than
720,000 associates across the nation, including more than 6,500 Pharmacists, proudly call
Wal-Mart home and work hard to make our vision reality.
Our pharmacies are not just limited to Wal-Mart Stores now. We've opened pharmacy
clinics in medical facilities, in SAM'S Clubs and even provide a drive-through window at
our new Neighborhood Market grocery stores. We believe in giving our Pharmacists the
opportunity to grow and develop in a multitude of ways during the course of their careers.
We have wide-ranging career paths that might be of interest to you.
FRANCHISING
We want our customers to trust in our pricing philosophy and to always be able to find
the lowest prices with the best possible service. We're nothing without our customers.
"Wal-Mart's culture has always stressed the importance of Customer Service. Our
Associate base across the country is as diverse as the communities in which we have
Wal-Mart stores. This allows us to provide the Customer Service expected from each
individual customer that walks into our stores."
New ideas and goals make us reach further than ever before. We try to find new and
innovative ways to push our boundaries and constantly improve.
"Sam was never satisfied that prices were as low as they needed to be or that our
product's quality was as high a they deserved - he believed in the concept of striving for
excellence before it became a fashionable concept."
FRANCHISING
SUCCESS STORY:
Archies came into existence in 1979. Next in line was the establishment was Archies
Gallery Chain. The first of its kind concept-store opened its door in Kamla Nagar in
Delhi in 1987 and was an instant hit. 1993 marked an opening of 100th Archies Gallery.
Anil Moolchandani, Managing Director of Archies Gifts & Greetings, hails from a
business family originally engaged in the business of sarees. Discontented with his family
business, Moolchandani commenced the business of selling posters and greeting cards
through mail order. His sharp acumen, keen sense of observation and ability to predict
future trends has helped him grow the business from a small beginning to the current size
of Rs700mn today.
FRANCHISING
In 1996 Archies had not only became a public company, it had also established itself as a
market leader. One key reason for this leadership position is the efforts and investment
that Archies had made in its distribution network. The resounding success of the
company is apparent from the ever expanding Franchise-network. Archies began
franchising in 1989 and currently have around 350+ franchises in 100+ cities and 6
countries and more than 100 company owned stores.
Brand Image
For three decades Archies has given millions of people means to express their joy and
love and created days of celebrations like Friendship day, Mother’s day, Daughter’s day,
Valentine’s day etc. and while doing so they have became a Super brand in India. Super
brand explore the history, development and achievements of 101 of the strongest brands
in India, revealing extra-ordinary findings along the way. Since the inception of super
brand concept in India, Archies was selected as a super brand in 2003-05, once again
making the list in 2006-08 as well as 2009-10. There are nearly 500 retail counters across
100+cities and 6 countries. More than 30 million people visit our stores in a year and they
have succeeded in bringing a smile on every face with their out-of-the-box greetings and
gifting ideas.
Over the years Archies have added to their portfolio, bringing to India, world famous
gifting brands. Today, the company boasts several collaborations. These includes
American Greetings Cards, Gund-soft toys, Russ-soft toys & gifts from US and Me To
You- Teddy & Fizzy Moon soft toys & gifts & Keel soft toys from UK.
FRANCHISING
Product:
Archies product portfolio contains all-occasion Greeting Cards, Gift Items, stationary,
posters, perfumes, fashion jewellery and accessories. The Archies success story is not
only limited to Indian stores. Archies also exports greeting cards and gifts to Western
Europe, Russia, the Dutch & Scandinavian markets. For the last 30 years Archies have
been reaching out to millions of hearts, constantly cheering a reason to smile and
celebrate occasion like friendship day, mother’s day, father’s day, Raksha Bandhan,
including Seasonal Greetings like Diwali, New Year, Christmas and every day cards like
birthday, anniversary, wedding, etc.
Archies create an endearing and endless variety of gift items like soft toys, photo frames,
quotations, mugs, etc, for special occasions all around the world. It produces and markets
international quality stationary items. Archies parfum has introduced a large collection
of perfume, deodorants, air fresheners and body spray each better than other. Keeping up
with the innovative approach, Archies introduced its sub-brands like Stupid-Cupid—a
range of trendy jewellery, handbags, sunglasses, hats and funky belts. They even came
FRANCHISING
with idea of corporate gifting and introduced “GiftWorks”. Moving ahead Archies
launched Ginger-Lemon caption based T-shirts for boys and girls. Branded as Ginger-
Lemon, Masala-Tee’s, the branding has been carefully thought out, to bring out the zesty
and spicy USP of the product. Being aware of the huge potential in fashion accessories
market. The company has ventured onto this arena with DesignWE- latest fashion
accessories such as wrist watches, multi-function knives, wallets, pens, key chains, etc.
The Premises:
On best location in your city/ town/ mall.
Owned/ Leased / Rented.
Required Carpet Area approx. 500sq. ft. and above
On ground floor with minimum 15 ft. frontage.
Investment:
An approximate investment of Rs. 10-12 lakhs, which includes:
Franchisee fee Rs. 1,00,000/- non-refundable.
FRANCHISING
Security deposit Rs. 1,00,00/- interest free and refundable.
Cost of interior designing approx. Rs. 1000/- per sq. ft.
Accessories like Air conditioners, computer, music system and registrar approx.
Rs. 0.75 lakhs- 1 lakhs.
First consignment approx. Rs. 5-6 lakhs.
All franchisee contribute small sum towards common group advertising.
The premises:
On best location in your city/ town/ mall.
Owned/ Leased / Rented.
Required Carpet Area approx. 300sq. ft. and above
On ground floor with minimum 10 ft. frontage.
Investment:
An approximate investment of Rs. 7-8 lakhs, which includes:
Franchisee fee Rs.75,000/- non-refundable.
Security deposit Rs.75,000/- interest free and refundable.
Cost of interior designing approx. Rs.1000/- per sq. ft.
FRANCHISING
Accessories like Air conditioners, computer, music system and registrar approx.
Rs. 0.5 lakhs- 0.75 lakhs.
First consignment approx. Rs.3-4 lakhs.
All franchisee contribute small sum towards common group advertising.
2. I would rather work in a small company with high management responsibility and
personal exposure than in a large company with good reliable pay and prestige.
3. I would rather keep working on a problem until I solved it than seek help from others.
Strongly agree Mildly agree Mildly disagree Strongly disagree
FRANCHISING
4. I prefer investments with a -20% to +50% return on my money than a 5% fixed return
on my money.
Strongly agree Mildly agree Mildly disagree Strongly disagree
6. I would rather take extra time and capital to change a techniques that might increases
sales 10% per year than avoid the risk and stay with the present plan.
Strongly agree Mildly agree Mildly disagree Strongly disagree
7. I would rather win the highest award for achievement than be the highest paid
employee of a company.
Strongly agree Mildly agree Mildly disagree Strongly disagree
STRONGLY AGREE
AGREE
5 DISAGREE
4 STRONGLY DISAGREE
2
1
MONGINIS
ARCHIES BATA
STRONGLY AGREE
AGREE
5 DISAGREE
4 STRONGLY DISAGREE
2
1
MONGINIS
ARCHIES BATA
STRONGLY AGREE
AGREE
5 DISAGREE
4 STRONGLY DISAGREE
2
1
MONGINIS
ARCHIES BATA
STRONGLY AGREE
AGREE
5 DISAGREE
4 STRONGLY DISAGREE
2
1
MONGINIS
ARCHIES BATA
STRONGLY AGREE
AGREE
5 DISAGREE
4 STRONGLY DISAGREE
2
1
MONGINIS
ARCHIES BATA
6. I would rather take extra time and capital to change a techniques that
might increases sales 10% per year than avoid the risk and stay with the present
plan.
STRONGLY AGREE
AGREE
5 DISAGREE
4 STRONGLY DISAGREE
2
1
MONGINIS
ARCHIES BATA
7. I would rather win the highest award for achievement than be the
highest paid employee of a company.
FRANCHISING
STRONGLY AGREE
AGREE
5 DISAGREE
4 STRONGLY DISAGREE
2
1
MONGINIS
ARCHIES BATA
STRONGLY AGREE
AGREE
5 DISAGREE
4 STRONGLY DISAGREE
2
1
MONGINIS
ARCHIES BATA
STRONGLY AGREE
AGREE
5 DISAGREE
4 STRONGLY DISAGREE
2
1
MONGINIS
ARCHIES BATA
CONCLUSION
FRANCHISING
As per the research findings it was seen that majority of the respondents gave
similar response. From this we can say that the marketing, legal framework and
financial aspects are the same in different franchises.
Bibliography:
Books:
• How to open a franchise business? (Sendra Burt)
• Franchising- The Route Map to Rapid Business Excellence (Pramod Khera)
• Indian franchise (Mk Gandhi)
Webliography:
• www.franchise.org
• Franchiseindia.com
• www.wikipedia.com
• www.economictimes.com
• www.ifa.com