HTM 3244 Lecture Notes - Lecture 2: Isaac Singer, Franchising, Kfc
30 Aug 2016
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Lo2: franchising: franchising history, french origin free from servitude , developed as business method/ model in the us in the 1850s, singer (sewing machines) first established retail franchise isaac. Franchising: licensing grants right to sell a certain branded products not overall business structure, business owner isn"t entitled to support with licensing, franchising in the us a. Initial fee one time fixed fee or based on # of rooms (whichever is higher) a. i. Site approval, contract, etc: royalty fees usually % of sales (for hotels it is typical room sales, occasionally extends to f&b) paid off the top (regardless of profit or loss) b. i. Covers ongoing support, new menu items, new design, new computer systems, etc. b. ii. Ongoing profit motive for franchisor: advertising and marketing fee usually a % of sales c. i. Franchisor allowed to advertise the brand on a regional or national level c. ii. Goal is to increase brand recognition and drive sales c. iii.
