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Success of mcdonalds franchise history
Mcdonald's background info
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Franchisor: A Good Partner?
Introduction
Buying into a franchise business is a very serious decision for any business person. When you buy into a franchise you can pretty much be guaranteed that the goods and services you are selling will have almost instant recognition. The buyers of a franchise also receive training and support from a proven business model designed to help the franchise owner succeed. Even though there is a proven business model at work, buying a franchise is still risky and there aren’t any guarantees of success. Buying a franchise is an investment and like most investments there is a risk that the business owner will lose money on his/her investment. This research paper will examine the ins and outs of business franchises. A definition of Franchise structure will be examined, providing brief examples of two very large franchises: McDonalds and Starbucks. At the conclusion, the benefits, costs, and obligations of franchise ownership will be presented (SmallBusiness.com).
What is franchising
Business franchises have been around for a very long time. Franchising actually began soon after World War I with car dealerships and gas stations. Currently, there are a large variety of franchise examples, and they are predominantly in the food, service and retail industries (Franchises – an introduction, 2010, 1). When an investor buys a franchise, that investor is using another company’s successful business model. The word franc means free (anglo-french derivative) (Vines, Krakus, & Satterlee, 2010). The businessperson who buys the franchising company from the franchisor is responsible to continue to keep the product successful. You represent the franchisor and his success is your success. So he has a...
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... C, & Boulter, R S (Wntr 2010). The modern reality of the controlling franchisor: the case for more, not less, franchisee protections. Franchise Law Journal, 29, 3. p.139(9)
Obringer, Lee Ann. (2011). “How Franchising Works.” 1-7.
http://www.howstuffworks.com/franchising.htm/printable
Seid, M. and Thomas D. (2006). Franchising for Dummies. For Dummies; 2 edition
Shane, S.A. (2005). From Ice Cream to the Internet: Using Franchising to Drive the Growth and Profits of Your Company. FT Press.
SmallBusiness.com: Buying a franchise. (2011).
http://smallbusiness.com/wiki/Buying_a_franchise
“Starbucks Franchise Success Story.” (2011).
http://www.franchiseprospector.com/franchising-trends-starbucks.php
Vines, L D, Krakus, B., & Satterlee, K. (Fall 2010). Fractional franchise exemption: friend or foe?. Franchise Law Journal, 30, 2. p.72(16).
Moore, L 1997, The Flight to Franchising, US News & World Report. June 10, pp. 78-81.
The fast-casual restaurant is one of the most competitive and fastest growing industries in the world. Chipotle has thought to have reinvented this category and this has led to their explosive growth in the early stages of the company. As it has leveled off, however, one can see where mistakes have been made leading to the sharp decline in their sales and stock. Starbucks has continued to grow, but has also seen declines in their stock. Comparing these companies, one can see how each have went from standalone stores to market leading companies. They must continue to innovate otherwise they will be seen as just another restaurant and no longer see growth.
Panera Bread Company is an intriguing business operation that came to be an exceptional “fast casual” restaurant through observing, learning, acquiring, and divesting of unprofitable assets. Panera’s history began when Pavailler, a French oven manufacturer, opened a demonstration bakery in Boston by the name of Au Bon Pain in 1976. In 1978 an adventure capitalist by the name of Louis Kane purchased Au Bon Pain. Kane had great aspirations for expanding Au Bon Pain, but had little success. In 1981 Robert Shaich, a Harvard Business graduate, small business owner, and master baker, merged his own cookie bakery with that of Kane’s bread bakery forming Au Bon Pain Co. Inc. With Shaich’s smart business sense and Kane’s business connections the two partners, and co-CEOs, were able to successfully expand Au Bon Pain Co. Inc. while at the same time reducing debts incurred by Kane’s initial unsuccessfulness. In 1985 Kane and Shaich successfully transitioned their bakery into a “fast casual” restaurant by adding sandwiches to their menu. The year 1991 marked perhaps the greatest accomplishment for Kane and Shaich as this was the year they took Au Bon Pain public.
• The franchisees could leverage the ICEDELIGHTS brand, product, training capabilities, and real estate experience once ICEDELIGHTS could provide the support
Senior Management of PepsiCo is evaluating the potential acquisition of two companies – Carts of Colorado and California Pizza Kitchen – in order to expand the company’s restaurant business. If indeed PepsiCo decides to pursue the acquisition of one or both, they must decide how to align each of these business units in its historically decentralized management approach and how to forge relationships between the acquired business units and existing business units. In their evaluation, Senior Management is faced with the question of whether the necessary capital investment in order to purchase one or both of the businesses can be profitable for each of the acquired business units, but must also take into consideration that the additional business units will not hinder the profitability of the existing business units.
This paper explores the business strategies Chipotle is using for operations. Analyzing financial and operations data to discuss areas of concern as well as areas where Chipotle Mexican Grill is doing well. Discussions will include the importance of Chipotle’s menu preparation strategy and menu integrity. The marketing strategies Chipotle is using to increase operations and strategies used to compete against rivals in the competitive environment. Concluding with an overall evaluation of Chipotle’s business portfolio.
The purpose of the following paper is to be able to inform the reader(s) of the paper about the business goals of the ownership and operations of a Sports Bar Franchise. The topics of discussion will include the description of the goal of the business and subtopics of the types of goods and services that are provided by any Sports Bar Franchise, what types of customers will this business attract, and lastly, how and where the specified services are made available. The paper will also include dialogue about the strengths and weaknesses of an assorted of business organizations and which one would be most appropriate for the author’s business venture.
Kinsell, Krik. (June 2005). Factors to consider when planning consolidation. Franchising World, Vol. 37, Issue 6, pp. 63–65. Retrieved September 2, 2008, from: kirk.kinsell@ichotelsgroup.com
BR was sold to Delta Foods in 1996 for US $2 billion. At this time, it was one of the largest fast-food chains in the world generating sales of US $6.8 billion. DF purchase of BR brought in a new cultural paradigm. DF is an individualistic, aggressive growth company with brands they believe are strong enough to support entry into new overseas markets without the need for local partnership. The DF strategy is one of direct acquisition and JV’s were not part of their strong suit. DF strategic implementation is based on hiring local managers directly or transferring seasoned managers from their soft drink and snack food divisions. The DF disdain for JVs is clearly reflected by their participation in only those JVs where local partnering was mandatory (e.g. China) to overcome regulatory barriers to entry. JVs had been the predominant strategy for BR which was unlike the DF outlook. Terralumen’s strategy was misaligned and out of sync with the DF strategy. This was unlike the complementarity that existed with BR’s strategy. This misalignment began to affect the JV relationship that had worked well with BR in the initial years. The failure of Terralumen and DF to recognize this fundamental cultural difference between their operational strategy styles i.e. Individualistic and Collectivism leads to their inability to proactively create steps for better alignment in the early period after acquisition, creating uncertainties and difficulties for both corporations. There is a lack of communication and virtually absence of trust between two new partners. DF appeared to be flexing its muscles in the relationship and using a more masculine approach compared to Terralumen’s more feminine approach. Both the corporations are strategically involved in a complex situation where they appear reluctant to address the issues at stake and move ahead together. The DF strategy of
Franchise owners do not have the freedom to make changes to their products and services based on their own personal interests or market requirements (Brockhouse, 1989). The parent company is the one instead with the mandate to make such decisions. Independent business owners, despite the high likelihood to have a higher investment cost to start and operate their business, have more control over decisions to invest and what time to do so. In Shania’s case, she has many willing investors and therefore as an independent business owner she has the power to decide whether to include them or not. She can also decide who to include and who not to include as she pleases. Franchises are associated with risks of negative publicity like for instance if one business under the franchise screw up the blame is put on the entire franchise, but for Shania as an independent business owner doesn’t have to worry about such possibilities. Freedom does bring happiness according to online surveys. The greatest reward of being an entrepreneur is the ability to control one’s destiny and the destiny of their business (Jenkins,
This paper will provide an argument for diversification to be presented to board of directors for Starbucks. A strategy for diversification indicating the products and industries for diversification and how synergies may be gained will be provided. The identification and the discussion of the foreign market Starbucks should enter will be presented, along with the strategy it should use to enter the market. Challenges Starbucks may face in the foreign market will be discussed, as well how it might respond strategically to minimize the impact of these challenges.
franchises that belong to him as a man, or as a denizen, are inviolably to be preserved to
Since going public in 2000, Krispy Kreme Doughnuts has posted strong growth in same-store sales each quarter, with a consistency that would make most competitors envious. According to the Krispy Kreme’s most recent quarter, which ended August 3, 2003, it posted an 11.3 percents rise in system wide same-store sales, including 15.6 percents growth at company operated units (Peters, 2003). From the financial report of second quarter in 2003, it could foretell there would be more earnings growth in the future as long as Krispy Kreme finds more new markets in which to launch doughnut shops. Its average weekly sales are in large determined by newly opened stores. This also demonstrates that the doughnuts specialist’s soaring results and rise to the top echelon of industry performers can be attributed to successful expansion.
According to an article by Sadi,Syed,&Iftikhar(2011). Franchising is not new in Saudi Arabia. It was noted that customers appreciate the role of franchising in the development of local businesses and they noticed that franchising have a positive effect o...
The first step in any business is to think of or create a business idea. Without an idea, one cannot launch their business off the ground. A right direction is needed to create a business with a unique idea. However, other options include franchising or buying an existing business (1). Franchising allows an individual to run stores such as Burger King or McDonalds under the corporate name. It involves taking training classes and a heap of money in order to start a franchise. A Franchisee will have to buy products and services from the corporate entity they are franchising from, which is often required. Buying a franchise is like taking a piece of the pie from the company that is franchising and sharing that pie with everybody else. In addition having a franchise allows one to communicate and in essence become a big part of an added business opportunity (4). Franchising is far from easy to start and maintain for that matter. Starting a franchise involves a l...