SOCSCI 2EN3 Chapter Notes - Chapter 4: Booster Juice, Franchising, Second Cup
22 Oct 2016
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Franchising system: controlled via formal contracts that govern how business will operate. Franchising: unique type of business opportunity right to use a widely recognized product/name entire marketing system and ongoing guidance from the franchisor. Booster juice, second cup facilities of another business: benefits both parties. Higher probability of success: proven marketing concept: Product/service identification: training support, financial assistance, operating assistance. Provide range of operating services (e. g. equipment purchases, inventory) 4-2b: the cons of franchising: costs associated with the franchise. 4 components of franchising costs: initial franchise fee, cash investment, royalty payments, advertising costs, restrictions on business operations that can accompany a franchise contract, loss of entrepreneurial independence. 4-3 evaluating franchise opportunities (cid:498)disclosure document(cid:499) = a detailed statement of info. provisions for renew/cancellation: must inform potential franchisees of any restrictions, costs and. Franchisor"s finances, experience, size and involvement in litigation. Studies impact of franchising on economy and promotes franchising. More than 1200 franchisors, 12000 franchisees, 600 suppliers.
