Понятие франшизы. Обязанности сторон. Преимущества и недостатки данного бизнеса для обоих участников

Franchising – business system in which a company (franchisor) sells an individual (franchisee) the right to operate a business using the franchisors established system or format.

Franchisee:

pays:

- franchise fee (or front end fee) – to buy the license

- royalty (or management services fee) for continuing advice and assistance (calculated as a percentage of annual turnover)

- advertising fee to contribute to franchisors annual advertising and marketing costs

- finds necessary capital to open the business

- buys products from particular supplier appointed by franchisor

- complies with/conforms to standards (quality of the products)

- recruits and manages personal

- provides annual reports on sales

Franchisor:

- provides operation manual (information for franchisee to run his business)

- provides equipment

- promotes the business through national advertising

- chooses supplier

- controls the way franchisee manages his business

- may appoint master franchisee (to supervise the business in particular area)

Benefits

Franchisee:

- safe bet, reduced risk(you will not fail, you are investing in a business that’s already operating in other places)

- quick access(iа advice needed)

Franchisor:

- expands business without making investments

- no need to recruit personnel

Problems for franchisee:

- not free in activity

- huge financial responsibility, much capital required, pay back at least 7-10 years. If you need more money the f-r won’t offer you any cash. He will literally just take the franchise from you when you lost much money.

- staff may let you down, you are the one who has to step in, maybe work in the kitchen…

- flexibility and willingness to work hard are necessary

Secrets of successful franchise:

- you need to have much dedication to the job.

- preparation - the most important part - in this business you need to be looking at the future

- staffing is the main problem. You have to find the right people who will enjoy their not a high-paying job.

- You need to be sure that you are constantly matching 2 issues:

- A)your bills will remain pretty constant B) you have a long- term vision (no immediate payback)

- be patient and enjoy the daily success of the business