StudentShare solutions
Triangle menu

Franchising Marketing - Essay Example

Nobody downloaded yet

Extract of sample
Franchising Marketing

Franchising has been recognized as a successful business model leading to accelerated expansion of the new store with local control of the franchise owners assuring lesser financial risks with rewards associated with local ownership which requires lower level of supervision and economies of scale. "The most widely accepted definition of a franchise refers to a contractual relationship between a franchisee (usually taking form of a small business) and a franchisor (usually a larger business) in which the former agrees to produce or market a product or service in accordance with the blueprint devised by the franchisor"(Stanworth et al. 1995)
Management Structures: Franchising is primarily defined in terms of the legal business agreement between two partners, the franchisor and the franchisee. The franchisor, who has previously established a market-tested business package of products or services, enters into a continuing contractual relationship with a number of franchisees, typically small business owners, who must operate their businesses according to the franchisor's specified format (Curran and Stanworth, 1983). The franchisor provides a proven method of operation, support, and advice on the setting up of the new franchisees, and also guarantees continuing support to the franchisee. In return, the franchisee pays a lump sum entrant fee and other charges for regular services (that is, royalty on sales, advertising fees, marketing levy) (Fulop and Forward, 1997). Franchising has been adopted a growth strategy for many firms in business with the advent of globalization. It is a different from other form of business. A franchise is a hybrid form of business characterized by complex contractual arrangements (Eisenhardt, 1989). Though many franchises operate between hybrid and the hierarchy (centralized or organizational) firm and incorporate both the franchised units as well as the company owned outlets (Brickley and Dark, 1987)
In a hybrid operation, the franchisor monitors and controls the franchisee within the limits specified in the franchise agreement. In contrast, the franchisor operates company-owned outlets through his or her authority over a centralized bureaucracy or as a hierarchical organization. The resource scarcity theory and the agency theory explained the theory of franchising around the hybrid and hierarchy forms of franchise organization.
Support for the agency theory as a rationale behind franchising was substantial. Research found that the franchisee motivation as an agent was perceived to be the most important strategy of the franchise firms (Oxenfelt and Kelly, 1968-69) while the capital advantage of franchising, which was proposed by the resource scarcity theory, had a low acknowledgement by the franchisors (Lillis, Narayana and Gilman, 1976). The franchisee's high motivation was probably derived from the nature of the franchise relationship. Franchising involves an exchange relationship between franchisor and franchisee which was sometimes described as a partnership or strategic alliance (Stanworth and Kaufmann, 1996). The franchisee is simply managing an outlet featuring the corporate strategy of the franchisor and to a certain extent possesses a degree of autonomy in managing the outlet (Dant and Gundlach, 1998). Unlike the company-owned manager, the franchisee enjoys more dependency in running the day-to-day business
Franchisee and Franchisor: The ...Show more


The modern globalization has led to expansion and management of the businesses in the new model of franchise chain organization. There is marked change in the wide network of franchising, worldwide expansion of businesses have taken place in United States…
Author : volkmanvidal
Franchising Marketing essay example
Read Text Preview
Save Your Time for More Important Things
Let us write or edit the essay on your topic
"Franchising Marketing"
with a personal 20% discount.
Grab the best paper

Check these samples - they also fit your topic

Business Idea-Franchising
After Riyadh and Jeddah, Dammam stands as the third largest city in Saudi Arabia. Dammam provides excellent convenient facility for the purposes of travel. There is a great demand of fashionable clothes. Thus, opening a clothing store which will look to import clothing for men as well as women of different ages at cheap prices from China will provide a good business opportunity in the city.
3 pages (750 words) Essay
International Business - Franchising
The franchising package would include strong branding, full training in procedures, and full launching support for which a franchisee fee is paid (as percentage of his turnover). This expedites the franchisor's continue support and promotion of the brand (IFM 2005).
4 pages (1000 words) Essay
Can Franchising as a strategy help organization gain market share globally case study as Starbucks
A franchise can be defined as an accord or a permit between two lawfully independent parties which present: an individual or a group of individuals the right to market a product or service using the ,brand name of another business ,the right to market a product or service ,using the working methods of the other brand name ,the obligation to pay the brand name fees for these rights , the franchisor the obligation to provide rights and support to franchisee1.
5 pages (1250 words) Essay
Franchising - marketing
Indonesian Government Regulation 16 defines franchising as "an agreement where a party (Franchisee) is granted a right to utilize and/or to make use of intellectual property rights or inventions or special characteristics of a business owned by the other party (Franchisor) based on payment as determined by the Franchisor for supplying or marketing certain products and/or services.
8 pages (2000 words) Assignment
Franchising - marketing
Indonesian Government Regulation 16 defines franchising as “an agreement where a party (Franchisee) is granted a right to utilize and/or to make use of
8 pages (2000 words) Essay
Agency and Franchising
According to McGoldrick, ‘The customers and their needs should play a central role in all business activities’ (McGoldrick, 2002). In the present market scenario a more aggressive approach to market its goods and services need to be adopted to meet the challenges of the
2 pages (500 words) Essay
Examine the role of Business Format Franchising in multinational businesses and define the effect of International Franchising on globalisation
The franchisor has an established business package and enters into contractual relationship with small firm owners known as franchisees. The franchises have to necessarily operate their business according to the terms and the format as specified by the
12 pages (3000 words) Essay
Case study in franchising store
defines the franchising as “a method of market expansion utilized by a successful business entity wanting to expand its distribution of services or product through retail entities owned by independent operators using the trademarks or service marks, marketing techniques, and
8 pages (2000 words) Essay
Advantages and disadvantages of franchising. Give examples and evidence to support your answer
Mostly, this kind of predicament is evident with new firms intending to penetrate a given regional market but unable to do so because of the already operating players in that place. Therefore, this prompts numerous corporations result to franchising with the intention of
4 pages (1000 words) Essay
However, in order to meet the potential challenges and use the opportunities available, Starbucks has to keep its strategy and apply its marketing techniques to differentiate its brand from the competitors
9 pages (2250 words) Essay
Hire a pro to write
a paper under your requirements!
Win a special DISCOUNT!
Put in your e-mail and click the button with your lucky finger
Your email
Comments (0)
Click to create a comment
Contact Us