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Franchising and the Entrepreneur - Coggle Diagram
Franchising and the Entrepreneur
Types of Franchising
Product Distribution:
A franchisor licenses a franchisee to sell its products under the franchisor’s brand name and trademark through a selective, limited distribution network.
Pure:
A franchisor sells a franchisee a complete business format and system.
Trade-Name
Franchisee purchase the right to use the franchisor's trade name without distributing particular products exclusively under franchisor's name.
Benefits of Franchising
Management training and support (start-up and ongoing)
Standardized quality of goods and services
Greater chance for success
Drawbacks of Franchising
Limited product line
Unsatisfactory training programs
Strict adherence to standardized operations
Ten Myths of Franchising
Franchising is the safest way to go into business because franchises never fail.
I’ll be able to open my franchise for less money than the franchiser estimates.
The bigger the franchise organization, the more successful I’ll be.
I’ll use 80 percent of the franchiser’s business system, but I’ll improve upon by substituting my experience and know-how.
All franchises are the same.
I don’t have to be a hands-on manager. I can be an absentee owner and still be very successful.
Anyone can be a satisfied, successful franchise owner.
Franchising is the cheapest way to get into business for yourself.
The franchiser will solve my business problems for me; after all, that’s why I pay an ongoing royalty fee.
Once I open my franchise, I’ll be able to run things the way I want to.
Factors that make Franchise appealing
Registered trademark
Profitability
Unique concept or marketing approach
Positive relationship with franchisees
Right way to buy a Franchise
Consider your franchise options.
Talk to existing franchisees.
Research your market.
Trends shaping Franchising
Smaller, nontraditional locations
Intercept Marketing: putting a franchise’s products or services directly in the paths of potential consumers, wherever they may be.
Conversion Franchising
Owners of independent businesses become franchisees to gain the advantage of name recognition
Refranchising
Franchisors sell their company-owned outlets to franchisees.
International opportunities
Many franchises are focusing on international markets as a source of growth.