If u want rapid business growth with minimum financial risk, one need to learn the concept of franchisor and franchisee. There may be so many entrepreneurs and business men who have a good business of own, good product , good quality and good service but no expansion in his/her business, then one must go through this model. Here he/she can become the master franchiser.
ROLE OF A MASTER FRANCHISER:-
The master franchiser acts as the owner of the company or the business. In this model , the master franchiser shares his companies - proprietary tools , trademarks , technology, signages ,software, business process and manuals to the franchisee( a person). In return , the franchise provides him with a revenue , profit and royalty. A master franchiser can run his company in low budget with a minimum financial risk and expansion of business is rapid.
ROLE OF A FRANCHISEE:-
A franchisee takes the readymade company from a master franchisor and implements his own skills to expand the company. It may cost less to buy a franchise then start your own business of the same type. Franchises often have an established reputation and image , proven management and work practices, access to national advertisements and ongoing support. A franchisee gets a set up business model, blueprint ready and ready operating methods. In addition to , being an entrepreneur , he gets a ready brand , a ready customer base and it is easier to work on the company.
Franchising business has different modulations and processes -
1) Company owned and Company operated: Here, company, itself looks after the capital expenditure and operational expenditure. A franchisee acts as an investor into the company.
2) Franchisee owned and Company operated: The franchisee is responsible for the capital expenditure here and the master franchisor is responsible for the operational one. Special skills and implementation are done only by the master franchiser.
3) Franchisee owned and Franchisee operated: Here , the master franchisor acts as a king who gives the trademark, brand , manuals and standardisation to the franchisee in lieu of royalty. The franchisee has the responsibility to work on the business and earn profit. The master franchiser has no responsibility here. Expansion in this model is excellent but there there is a risk in this model, your brand is being used by him, failing to follow your standardization , your brand may collapse.
ADVANTAGES OF FRANCHISING BUSINESS:
1) No tension for running cost.
2) You get a recurring revenue.
3) You get an international presence.
4)you build an economics of scale.
DISADVANTAGES OF FRANCHISING BUSINESS:
1)Loosing control of your business , the franchisee can collapse your whole brand and so as your company.
2)Buying a franchise means entering into a formal agreement with the master franchisor.
3)Franchise agreements dictate how you run the business , so there may be little room for creativity.
4)Bad performances by other franchisees may affect your franchise's reputation.
Source - google
ROLE OF A MASTER FRANCHISER:-
The master franchiser acts as the owner of the company or the business. In this model , the master franchiser shares his companies - proprietary tools , trademarks , technology, signages ,software, business process and manuals to the franchisee( a person). In return , the franchise provides him with a revenue , profit and royalty. A master franchiser can run his company in low budget with a minimum financial risk and expansion of business is rapid.
ROLE OF A FRANCHISEE:-
A franchisee takes the readymade company from a master franchisor and implements his own skills to expand the company. It may cost less to buy a franchise then start your own business of the same type. Franchises often have an established reputation and image , proven management and work practices, access to national advertisements and ongoing support. A franchisee gets a set up business model, blueprint ready and ready operating methods. In addition to , being an entrepreneur , he gets a ready brand , a ready customer base and it is easier to work on the company.
Franchising business has different modulations and processes -
1) Company owned and Company operated: Here, company, itself looks after the capital expenditure and operational expenditure. A franchisee acts as an investor into the company.
2) Franchisee owned and Company operated: The franchisee is responsible for the capital expenditure here and the master franchisor is responsible for the operational one. Special skills and implementation are done only by the master franchiser.
3) Franchisee owned and Franchisee operated: Here , the master franchisor acts as a king who gives the trademark, brand , manuals and standardisation to the franchisee in lieu of royalty. The franchisee has the responsibility to work on the business and earn profit. The master franchiser has no responsibility here. Expansion in this model is excellent but there there is a risk in this model, your brand is being used by him, failing to follow your standardization , your brand may collapse.
ADVANTAGES OF FRANCHISING BUSINESS:
1) No tension for running cost.
2) You get a recurring revenue.
3) You get an international presence.
4)you build an economics of scale.
DISADVANTAGES OF FRANCHISING BUSINESS:
1)Loosing control of your business , the franchisee can collapse your whole brand and so as your company.
2)Buying a franchise means entering into a formal agreement with the master franchisor.
3)Franchise agreements dictate how you run the business , so there may be little room for creativity.
4)Bad performances by other franchisees may affect your franchise's reputation.
Source - google
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