Franchising
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Franchising involves a franchisor offering a franchisee the authorization to distribute, produce, and sell the franchisor's goods and services for a specified period. The franchisor provides brand positioning, knowledge, and technical assistance to the franchisee. The franchising contract regulates the obligations of both parties. Franchising has advantages like established reputation and management assistance for franchisees, while providing expansion and income sources for franchisors. However, both parties also take on certain disadvantages like less independence and control issues.
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The document discusses the merits and demerits of franchising for both franchisees and franchisors. Key advantages for franchisees include brand recognition, reduced capital investment, and access to training, while disadvantages include loss of ownership, lower profits, and dependence on the franchisor. For franchisors, benefits include profit potential with low capital risk, but challenges encompass managing a network of franchisees and potential conflicts.Franchises
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Franchising - Introduction
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Merits & demerits of franchising
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Franchising
- 1. FRANCHISING
- 2. FRANCHISING Commercialization and services, where the franchisor offers through a contract, the authorization for the distribution, production and sale of goods and services successful the franchisee for a specified period.
- 3. WHO MAKE UP A FRANCHISING Franchisor: Franquiciante Franchisee: Franquiciado The function of franchising contract is to regulate relations between franchisor and franchisee, providing obligations for both parties.
- 4. ELEMENTS Brand positioning in the market. Transmission of knowledge, experience franchisor. License of items of property continued provision of technical assistence to the franchisee. TYPES OF FRANCHISING Excess product or trademark Business Format Franchising Franchising by convention Social franchising
- 5. ADVANTAGES DISADVANTAGES Reputation Less Independence Working Capital Standardization Experience slow Management Assistance Cancellation of the contract Utilities Control of franchise Motivation Competitor
- 6. FRANCHISOR ADVANTAGE DISADVANTAGES Fastest growing business Investment in training and supervision. New segments The investments are recovered in the medium and long term. Expansion to national and Possible omission of international markets franchisse on revenue, reducing royalty payments. The expansion is done with Undisciplined franchisee other people卒s money. that can alter the quality. Constant income through Little discipline by the royalties. franchisee. Gets creative partners. No financial responsibility in case of bankruptcy of the franchisee.
- 7. OBLIGATIONS Transmit secrets, trademarks, patents a franchisee Technical and commercial support to the franchisee during the term of the contract. Provision of services / products Clauses franchisee activity Clause in favor of the franchisee
- 8. FRANCHISEE ADVANTAGE DISADVANTAGES Start a business with little No acceses to ownership capital business of the brand. recognition Allow monitoring and control of the franchisor. the prestige of the brand The contracts are short (5 succes probability years) Franchisor providers Payment of entry. Help in the areas of sometimes maladaptive to marketing, fanancial. the philosophy of the franchisor. Learn constant new loss of business services/ products. independence. exclusivity zone. Maintain an unwanted parther, the duration of the franchise.
- 9. OBLIGATIONS Invest in the business under the franchisor's instructions. Payments or credits on royalties Conduct a minimum annual sales figure Use or sell the products of the brand of the franchisor to maintain a uniform image. Duty not to compete during and after a contract year ended.
- 10. LICENSE It is where the trade mark owner authorizes use a third in exchange for financial compensation. DIFFERENCE BETWEEN LICENSE AND FRANCHISING In the franchising, the franchisee is subject to additional obligations; In the license there is freedom of brand, accordance with the protocols signed.
- 11. SOURCES http://winred.com/biblioteca/franquicias.pdf http://books.google.com.co/books?id=2vlilUI_i6E C&printsec=frontcover&dq=franquicias&hl=es&sa =X&ei=GcNHUYmTK4O08QS9wIHgBQ&ved=0C DEQ6AEwAA#v=onepage&q=franquicias&f=false http://books.google.com.co/books?id= xdYM6VXZXQC&pg=PA86&dq=franquicias&hl=e s&sa=X&ei=GcNHUYmTK4O08QS9wIHgBQ&ve d=0CF4Q6AEwCA#v=onepage&q=franquicias&f= false