Starting New Business
(Buying Franchise)
Sesi 8
J0692 - Entrepreneurship
Franchise
J0692 - Entrepreneurship
Definition
According the International Franchise
Organization, franchise is defined as a
“A continuing relationship in which the
franchisor provides a licensed privilege to
do business, plus assistance in organizing,
training, merchandising and management
in return for consideration from the
franchise”
J0692 - Entrepreneurship
The franchisor perspective
•
•
•
•
More rapid expansion (+)
Capital (+)
Image (-)
Less profitability (-)
J0692 - Entrepreneurship
The franchisee’s perspective
• Cost
– Franchising Fees
– Conformity to standard operating
procedures
– Inability to make change readily
– Dependent on franchisor’s success
J0692 - Entrepreneurship
The franchisee’s perspective
 Benefits
– Lower risk
– Establish product or service
– Experience of franchisor
– Name recognition
– Management assistance
– Business plan
– Start-up and marketing assistance
– Proven system of operation
J0692 - Entrepreneurship