Franchisor: A Good Partner

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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...

... middle of paper ...

... 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).

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