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Franchising (Benefits to franchiser (Expand business into areas with not…
Franchising
Benefits to franchiser
Expand business into areas with not market share
Less capital expenditure needed
Profits increase as they receive money from franchisee
Defenition
License to copy business
Franchiser sells license
Franchisee allowed to replicate system
Easons
Mc Donalds
Benefits to franchisee
Reduced risk
Known brands,easier to attract costumers
Economies of scale savings in advertising
promotions
centralised purchasing
Disadvantage to franchisee
Upfront and ongoing costs
payment for license
yearly fee / percentage sales (royalties)
Can't sell business without permission of franchisor
Loss of control
Limited range of products