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Factors:
1. Business name 2. Market research 3. System ideals and the operating manuals 4. Proprietary marks 5. Experience 6. Good judgement of the franchisor 7. Training 8. Location assistance and approval 9. Store layout and construction supervision 10.Exclusive area coverage 11.Procurement programs 12.Hiring assistance 13.Grand opening assistance 14.Marketing strategies
Business Name
-The franchisee may have a different company name but its products should have the names that are patented by the franchisor. -The name and the way it is written designed or printed should be uniform with the other franchise outlet.
Market Research - The marketing research of the franchisor should benefit the
franchisee.
- It will serve as guide to help the franchisor in evaluating the proper location, promotions, personnel, distribution and the target segment.
Proprietary marks
-Include the logo, slogans and other printed signs that show distinction of the franchise. -The franchise is allowed to use the patented marks of the franchisor.
Experience
-This is an important service that the franchisor provides to the franchisee. -With the vast experience of the franchisor, the franchisee avoids mistakes commited by a new and growing company. -It will help reduce losses brought about by the miscalculation of risks.
Training
-Franchisor provide training assistance to the franchisee.
-This is a critical aspect of the franchisee because training does not only provide knowledge of the operation but more importantly, it highlights and emphasizes the contextual framework for the franchisee.
-The continuous training provided by the franchisor organization avoids poor management.
-Exclusive areas provide the outlet with the needed target population without the threat of competition coming from the same organization.
Procurement programs
-Franchisee organizations share the system of procurement with the franchisees. -It provides the list of authorized suppliers for different needs of the franchisee outlet. -The suppliers give franchisees the product at discounted prices.
Hiring assistance
-The franchisor usually gives the franchisee the guidance needed in hiring personnel that would fit the nature of the organization. - ensuring qualified personnel is an important preparation prior to opening of the outlet.
-The assistance is helpful especially to those who are just beginning to run their own business.
-The organizations commonly sets aside the some of its personnel to help the franchise in selecting or screening of applicants.
Marketing strategies
-The franchisor is generally familiar with tested and proven strategies to guide the franchisee to remain competitive. -It includes aspects of advertising and different promotional tactics designed to ensure continued profit.
1. 2.
3. Personal satisfaction 4. Tax benefits 5. Freedon to pursue the job you want 6. Assurance of continuous employment 7. Eliminates the difficulties in starting up 8. Ease in operationalizing the business plan 9. Benefits of having an establised system 10. Benefits from quality research and development
-The amount of compensation they receive does not reflect in the income they get.
Personal satisfaction
-success may be measured in two ways: by the amount of money and property one acquires and by the amount of personal satisfaction gained in doing certain matters. -There are a lot of wealthy individuals that will declare that although having money brings, benefits, personal fulfillment brought about by achieving dreams, making a management turnaround, employing people are more self gratifying.
Tax benefits
-Owning a business venture may spell a lot of perks for the entrepreneur.
-The entrepreneur can spend substantial amount for cars, travel and reflect it as company expenditure.
-Good management allows quality time with the family, friends or for recreation.
Quicker start up
-the preparations prior to start up are less time consuming for a franchise as compared to starting a business. -The initial preparations for franchising have already been made by the franchisor.
Cost of investment
-the amount to be shed for a franchise is substantial. a. Franchise fee - Depends upon what type of business b. Set up operation - These are expenses incurred for the renovation or the construction of the building. c. Operational expenses and purchases - The franchise may have to shell out some amount to ensure the flow of operation since the initial sales may not be enough to cover the needed expenditure.
-It may also apply to a local company that has plans of extending its operations to other places and wants to apply their management style in all the stores -They are the ones that offer sub franchises to other people interested in the business.
-The cost of master franchise are smaller than the sub franchise.