Franchise Business Model Overview

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Questions and Answers

What is the franchise fee for Bayad Center for a duration of 5 years?

120,000 pesos

350,000 pesos (correct)

130,000 pesos

600,000 pesos

Which restaurant chain is categorized as fast-food according to the content?

Dunkin’ Donuts

Jollibee (correct)

Casual Dining

Culver’s

What is the minimum square meter requirement for setting up a Bayad Center?

15 square meters (correct)

20 square meters

10 square meters

25 square meters

Which of the following is NOT listed as a type of convenience store in the Philippines?

Anago Cleaning Systems Signup and view all the answers

What type of services does RE/MAX Phil. provide?

Real Estate Services Signup and view all the answers

What is the estimated cost of equipment needed to start a Bayad Center?

120,000 pesos Signup and view all the answers

Which franchise is listed as an example of health and beauty aids?

Great Clips Signup and view all the answers

What is the promised return on investment (ROI) time frame for Bayad Center?

2 years Signup and view all the answers

Which company did JFC acquire in 2019?

The Coffee Bean and Tea Leaf Signup and view all the answers

What type of cuisine does McDonald's primarily offer in the Philippines?

American Signup and view all the answers

How many different types of lotto games are mentioned in the content?

5 Signup and view all the answers

Which pizza franchise has over 1,200 locations in the Philippines?

Pizza Hut Signup and view all the answers

What percentage of shares did JFC purchase in Milksha in 2021?

51% Signup and view all the answers

Which of the following offers franchising opportunities according to the content?

Shakey's Pizza Signup and view all the answers

Which company established a joint venture with Yoshinoya in 2021?

Jollibee Signup and view all the answers

Which type of products does 7-Eleven sell?

Convenience store items Signup and view all the answers

What is a key benefit for a franchisee in a franchising operation?

Access to the franchisor's knowledge and advertising clout Signup and view all the answers

Which of the following is NOT a major component of a franchise opportunity?

Completely free capital investment Signup and view all the answers

What does a franchise agreement typically allow the franchisor and franchisee to do?

Bring their particular strengths to the business arrangement Signup and view all the answers

What payment does the franchisee typically make to the franchisor on a regular basis?

Monthly or quarterly royalty fees Signup and view all the answers

Which statement accurately describes a franchisor?

They are individuals or businesses granting rights to a franchisee Signup and view all the answers

What is a franchisee granted access to under a franchise agreement?

Proprietary business knowledge and branding Signup and view all the answers

What is typically included in a franchisee's responsibilities?

Adhering to quality standards set by the franchisor Signup and view all the answers

What does the term ‘turnkey operation’ imply in franchising?

A fully equipped and operational business model provided by the franchisor Signup and view all the answers

What is a key benefit for a franchisee in a franchising relationship?

Established product or service Signup and view all the answers

Which of the following represents a disadvantage for franchisees in a franchising agreement?

Restrictions on ownership freedom Signup and view all the answers

What does a franchisor generally gain from entering into a franchising agreement?

Expansion opportunities without direct investment Signup and view all the answers

In a joint venture franchise, what is a common misconception about its nature?

It is often documented within a singular legal contract Signup and view all the answers

Which critical factor can affect the franchisor-franchisee relationship's success?

Mutually approved activities and communication Signup and view all the answers

Why might a franchisor choose to adopt a joint venture model?

To share risks and resources in a more balanced way Signup and view all the answers

Which of the following best describes the royalty fee in a franchising agreement?

A payment based on the franchisee's sales revenue Signup and view all the answers

What is a common expectation that may lead to failed outcomes in franchising?

Immediate profitability without sufficient marketing Signup and view all the answers

What type of restaurants fall under the midscale category?

Coffee lounges and restaurant buffets Signup and view all the answers

Which of the following is NOT included in the recreation, entertainment, and travel category?

Accounting firms Signup and view all the answers

Which option best defines business-format franchising?

A structured approach enforced by the franchisor Signup and view all the answers

What is the primary function of a franchisee?

To operate in accordance with the franchisor's guidelines Signup and view all the answers

Which statement about automotive products and services franchising is accurate?

They specialize in muffler replacements and minor car repairs. Signup and view all the answers

Which business opportunity approach is described as informal?

Business-opportunity approach Signup and view all the answers

What benefits are associated with midscale restaurants?

Affordable full meals perceived as good value Signup and view all the answers

Which of the following is a key factor in evaluating franchise opportunities?

Adaptability of the franchise model Signup and view all the answers

Study Notes

Franchise Overview

A franchisee benefits from a turnkey operation which includes site selection, architecture, workflow, and customer service plans determined by the franchisor.
Franchising provides an avenue for individuals with limited capital and experience to achieve business success.

Major Components of Franchising

Trademark or Logo: Grants franchisees the right to use the franchisor's brand.
Marketing Plan: Allows franchisees to sell products/services according to an established plan.
Royalty Fee: Franchisees pay an ongoing fee, typically a percentage of gross sales, which is often paid monthly or quarterly.

Key Definitions

Franchisor: The entity that grants franchise rights and receives fees from franchisees.
Franchisee: The individual or business authorized to operate under the franchisor's brand.

Notable Franchise Examples

The Coffee Bean and Tea Leaf: Acquired by JFC in 2019, offering various drinks.
Milksha: JFC purchased a controlling share in 2021.
Shakey's Pizza: Offers a strong franchise model in the pizza industry.
McDonald's: Largest franchise in the Philippines with over 650 locations serving American cuisine.
7-Eleven: Leading convenience store franchise with diverse product offerings.

Popular Franchise Categories

Convenience Stores: Includes brands like Ministop and Family Mart.
Pharmacy/Dugstores: Popular options include The Generics Pharmacy and Generika Drugstore.
Restaurants: Franchises range from fast-food (Jollibee, Burger King) to casual dining (Shakey's, Sizzler).

Franchise Start-Up Considerations

Initial Fees and Investments: Bayad Center requires a cash bond and franchise fee, including additional costs for equipment and site restoration.
Minimum Space Requirements: Typically around 15 square meters for certain franchises.

Franchise Types

Business-Format Franchising: Involves following a specific format dictated by the franchisor.
Joint Venture Franchising: Combines a franchise with a partnership, often leading to misunderstandings about legal rights and responsibilities.

Advantages of Franchising for Franchisees

Established brand recognition and market presence.
Access to technical support and managerial assistance.
Standardized quality control and operational guidelines.

Disadvantages of Franchising for Franchisees

Risk of unmet expectations and potential financial losses.
Ongoing service costs and operational fees.
Limited autonomy and decision-making power.

Advantages of Franchising for Franchisors

Expands market reach and business presence through franchising.

Considerations for Success in Franchising

Importance of evaluating both franchisor and franchisee situations before entering into an agreement.
Critical factors for success often lie in the dynamics of the franchisor-franchisee relationship.

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Description

This quiz explores the fundamentals of franchising, emphasizing the benefits and opportunities for small business owners. Learn about the relationship between franchisors and franchisees, including the turnkey operation concept and marketing advantages. Understanding these concepts is crucial for anyone interested in venturing into the franchise world.