Representitives:Angie Li, Josh Steinegger,
Michelle East, Susanna Harbach
Franchise
• “A franchise is a business model that involves one business owner licensing trademarks and methods to an independent entrepreneur”. --U.S. small business administration
Brand name, training, marketing plan, management support
Pay fees
Franchise Types• Product distribution franchises
o Franchisor licenses its trademark and logo to the franchisees o example: Coca-Cola, Goodyear-Tires, Ford Motor company
• Business format distribution franchiseso provides to franchisee a full range of services, including site selection,
training, product supply, marketing plans and even assistance in obtaining financing.
o example: Wendy’s, Great Clips, UPS store
Franchise Arrangement Types• Single-unit (direct-unit)
• Multi-unit
Franchisor franchisee Franchise unit
Franchisor franchisee Franchise unit
Franchise unit
Franchise unit
Self Evaluation
Motivated by results
Chief Cheerleader
Step 1: Self Evaluation
Step 2: Pick a Franchise Consultant to Assist You
Step 3: Research
Pros and ConsPros Cons
Name recognition
Support management
Long-standing training program
Prepared material and equipment
Small business learning experience
High franchise fees
Limited control
Limited duration
Company trouble can impact the local business
Step 4: Attend “Discovery Day”Step 5: Speak to Other Franchisees1.“In the beginning, the last person paid is you”2. Unknown competitors3. Closed stores4. Change in demand5. New laws or government regulations 6. More than making money7. Marketing support and training 8. Hype of a company. Check the facts with other sources.
Step 6 Find a suitable location• High demand of products and services• Relatively low competition
Step 7 Choose a franchise and secure funding
• Measure the potential growth• Compare companies’ business model• Six common cost
Franchise FeeLegal FeesBuild-Out Costs Inventory Supplies working capital
Source: Fro Yo Spot Frozen yogurt
Franchise Cost by categories
• http://www.franchise.com/franchise-news/Basic_Cost_By_Category.cfm
Source: http://www.entrepreneur.com/franchise500/index.html
Top 10 Franchises for 2014
Secure funding
• Funding budget sources:o Government loans-U.S. Small Business Administration (SBA) loanso Bank loanso Franchiser internal financing
Step 8: Sign the AgreementStep 9: Obtain All Necessary Permits and
Insurance
Step 10: Hire Staff and Attend Training
•Who you hire• The kinds of training usedOperations Manual
Headquarters TrainingOnsite TrainingOngoing TrainingTrain, Train, and Over-trainTest for Competence
• Soft VS Grand Openings
ACTIVITY
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