The Franchise As A Form Of Business Organization - Essay Example
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The franchising concept allows people the ability to purchase a business concept from the franchise. There are lots of benefits associated with franchising. The first benefit is that the franchisee obtains the brand value of a company without having to invest years of marketing efforts to make the company popular. The franchisor is responsible for the marketing budget of the company. Big name franchises such as Burger King, Pizza Hut, and Taco Bell spend millions of dollars each year in advertising to attract customers to the establishments of its franchise owners.
When a person purchases a franchise they receive full training on how to operate the business from the franchisor. McDonald’s provides training to its franchisees by sending them to Hamburger University. The franchisor also helps the franchise find a good location for its establishment. The person that buys a franchise gets access to the privileged intellectual property, special formulas, and trade secrets that the company holds. As part of the contract, the franchisee must be purchased the raw materials for its product from the franchisor. Since many franchises have thousands of establishments the matrix company is able to obtain economies of scale that are passed on to the franchise owners. This enables franchisees to have lower material costs than similar businesses competing in an industry.
Buying a franchise lowers the overall business risk of starting a company. The person buying a franchise does not have to start a business from scratch. From the first day, the franchise opens the company has an established clientele base that desires the products and services that the franchise offers. Franchises have higher customer retention rates than independent stores. The franchisees receive managerial and administrative support from the corporate headquarters during the lifetime of the business.
Owning your own business is a great way to achieve financial independence. In many instances, people have the resources to invest, but they do not have a good business idea. The purpose of the paper "The Franchise As A Form Of Business Organization" is to describe the benefits of franchising…
Organisations can be of two kinds, one is formal organisation and other is informal organisation. In case of informal organisation there is no specific structure. However, the formal organisation is built upon the organisational goals and missions.
According to the research findings, franchising is a good way of boosting the productivity of multinationals, at the same time ensuring economic growth in diverse economies. When authorities stress on job creation to curb unemployment, they should also create a conducive environment for foreign economies to operate in their territories.
A non-franchise business on the other hand, is a solo variety type of business, which has up-front costs involved during initiation. Franchise businesses require a greater amount of financial input as well as personnel in order to manage the business (Crawford and O'Donnell 20).
The forms of business organizations have developed and evolved hand in hand with the internal and external factors affecting them (Thomson and Strickland 2002). Sole proprietorship, partnership, and the corporation are the primary forms of business organizations in today's business arena.
There are several questions that I would want to have answered before committing to any financial opportunity. First of all, I want to know whether the franchise is simply purchasing naming rights, or if the
In those organisations, employees at every level possess their own purposes. In formal organisation structure the lower level workers give statement to higher level manager. The structure of organisation also varies according to size,
Terry Tobiko’s Daycare Center is a startup child care and support business that will be located at the heart of Grogan Hill. The daycare center will serve children between the ages of 2 to 4 years. The business will be under the management of Terry Tobiko, who will also be in charge of the center’s daily operations.
The reason that joint stock companies can raise capital easier than other forms of businesses is due to the ability to have multiple investors and because of the liquidity of shares. A limited liability company (LLC) is a type of business ownership combining several
Franchise businesses require a greater amount of financial input as well as personnel in order to manage the business (Crawford and ODonnell 20). The franchise business presented in this paper is a real estate