Essay - Franchises Are Becoming

Franchising

Franchises are becoming increasingly popular and successful, especially through our emerging economy. Technology and service oriented business are rapidly growing and franchising has been seen more frequently in these industries. Franchising is a great way to expand a company. By allowing others to use their original business model, trademarks, and other aspects, the company can expand beyond what original management could personally handle. Through this advantageous business practice, many advancements could be accomplished that were unobtainable before.

A franchise is an agreement made between two entities giving one the right to use the other's business structure while still remaining as a company independently owned and managed. These agreements grant the individual access to distribute their products or services under the franchisor's trademark. In return for this given right, the franchisor of the franchise agreement will get a percentage of the sales made. A franchise is a great solution for a business that is expanding beyond what it can single-handedly control. The original business can then extend their defined model to others in order to construct a more dispersed and profitable system. The more the business can multiply, the more room there is to thrive. There are benefits for the franchisee as well. With the guidance of a knowledgeable franchisor, the franchisee has a better chance of being successful than if they had to launch an entire business model on their own. Being handed all the strategies needed to jump-start a business is definitely a more attractive alternative to some when compared to the costs and amount of time that would be needed to come up with a plan on their own. The main objective of a franchise to keep all franchisor products, services, strategies, and quality consistent with all franchisees involved.

A type of franchise that is deemed as very successful is business format franchising. Under this approach, a comprehensive plan is formed to demonstrate the expectations of the management and operations of the company. Specific procedures are given to management to replicate the exact structure of the franchisor. Common problems and the correct ways to resolve them are also taught to the franchisee. The detailed instructions involved in a business format franchise are brought forth from the experimenting of the original company. This way of franchising is extremely beneficial for the franchisor and franchisee because all operations and management has been formed around what has worked and what has not worked for the original company. Their business model has been tested and revised if necessary which brings forth the opportunity of rapid growth through a franchise expansion.

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