MGT 255 - Chapter 6


What are some advantages of franchising for the franchisor?


Franchise fee

Royalties

Greater presence (rapid)


What are some advantages of franchising for the franchisee?


Good relationship with supplier

Training

Advertising

Knowledge from other franchisees


What are some disadvantages of franchising for the franshisor?


Risk

Lawsuit

Cost of training

They might not follow the rules


What are some disadvantages of franchising for the franchisee?


Start up fees

Must get equipment from franchisor

Advertising might not be good for you

Exaggeration of financial success


How do you become a franchisor?


1. Establish a prototype

2. Prepare necessary information

3. Investigate legal requirements

4. Develop a planned and standardized program of operations

5. Obtain adequate financing