Franchising Business Term Paper Example | Topics and Well Written Essays - 1750 words

Franchising Business - Term Paper Example On the other hand a franchise is a business where the owners or the franchisers sell their business rights to third parties called franchisees. Some of the big franchises are McDonalds, UPS and Subway [Purvin, 2008]. While investing in a franchise, the franchisee is required first to pay a fee to acquire the rights to the business, training and equipment required for that franchise. This is in terms of an ongoing payment according to how they will agree. As it can either be monthly or even on a quarterly basis which is a percentage of the gross sales for the business. The franchiser will direct the franchisee on the way to open another replica franchise but will not have such rights or powers as would have had had he opened his own business. After the signing of the contract, the franchisee will go on and open up a replica of the operation of the franchise business, in the direction of the franchiser. The franchisee therefore, will not possess as much in terms of control over the bus iness operation as he/she would have over theirs, but may benefit from investing in an already-established brand. It is important to note that the franchiser does not only enjoy the right to dispose the products but also to use the processes that have already been set in place by the business or franchiser and therefore is required to keep the processes, the logo and also the signs and the uniforms. Though this is true, the franchisee is to remain independent owner of the business. To begin a franchise, it will be important for the franchiser to contact a franchise attorney who will assist in making a viable franchise decision. Franchising allows one to grow the business quickly due the simultaneous opening of several units. The franchisee needs to provide the operators with ongoing support even though he technically does not own the franchise in cases like the obtaining of finances and in finding the site locations for the franchises. The first franchises were actually started in t he 19th century and some of the world’s famous and fast growing businesses are franchises. These include the companies like the McDonalds. Types of franchises 1. Business to business service In this type, the managers and the retail side share some of the characteristics. The franchise manages the operations part but does the selling. Is out to handle the customers and to sign their contracts but not to handle the day in the day out operations like receiving phone calls some of these like that of consultants can actually be done at home. 2. Retail franchise This involves itself with walk in retails services and therefore can sell the products of the company during the retail hours. This involves printing, food communication and fashion. These types of franchises need adequate staffing due to the many operations but they are owner operated. 3. Investment franchise In this franchise, a lot of capital is invested by the franchisee in the high cost franchise systems. The franchis ee operates this at arms length where a management team operates this on his behalf. The franchisee normally has a lot of experience in managing a large team. Examples of these are the restaurants and hotels. 4. Management franchise This is where the franchise is responsible of managing and coordinating the team of operatives and the