Franchising and Business Types Quiz

Franchising

• Joint venture franchise is a franchise granted to a joint venture party.
• Top 20 Global Franchises 2023 includes KFC, Jollibee Foods Corp (JFC), McDonald’s, and A Gasoline/Petrol Stations.
• Top 10 Best Franchise in the Philippines 2022-23 includes Jollibee Foods Corp (JFC) and McDonald’s.

Franchise Business Types

• Restaurant industry is one of the most dynamic segments
• Hotels, Motels and Campgrounds include Quality Inns, Holiday Inns, and Marriott Hotels
• Recreation, Entertainment and Travel groups include travel agencies, miniature golf courses, movie theaters, and dance studios.
• Automotive Products and Services include franchises specializing in muffler replacements, lube jobs, oil changes, and transmission repair.
• Business Aids and Services include accounting and financial planning firms, businesses and services, consulting and brokerages, education and training, gifts, and fund-raising specialists.
• Printing, Copying, and Sign Products and Services have the highest ratio of franchisors who make earning claims.
• Employment and Personnel Services have the highest ratio of franchisors that require the franchisee to be an owner-operator.

Franchising Advantages

• Established Product or Service
• Technical and Managerial Assistance
• Quality Control Standards
• Less Operating Capital
• Opportunities for Growth

Franchising Disadvantages

• Failed Expectations
• Service Costs
• Overdependence
• Restrictions of Freedom of Ownership
• Termination of Agreement

Franchising Advantages for Franchisor

• Expansion
• Motivation
• Operation of Nonunion Business
• Bulk Purchasing
• Cooperative advertising

Franchising Disadvantages for Franchisor

• Company-Owned versus Franchised Units
• Potential problem of Recruitment
• Potential problem of Communication
• Loss of Freedom

Franchisee Management

• Multiunit Franchisee is someone who owns or operates more than one franchised unit.
• Situation Audit is used to determine a firm's current operating situation by analyzing internal and external factors.
• Franchise Marketing is the process of attracting new clients or customers to increase awareness and drive revenue.
• Franchisee Training includes understanding reporting requirements, financial analysis approaches, and advertising and promotional support.
• Franchisor Support Package refers to measures that help maintain relationships between franchisors and franchisees.
• Training Manuals need to be prepared not only for franchisees but also for future employees within the franchised unit.
• Feasibility Study should contain enough information for franchisors and franchisees to make a "go or no-go" decision.
• Sales Promotion involves specific time-related efforts to improve sales of a particular product, line of products, or services.
• Advertising often promotes the overall franchise rather than offering specific products at promotional prices.
• Uniform Franchise Offering Circular (UFOC) is a disclosure document outlining business activities, required by the Federal Trade Commission (FTC) from all franchisors.

Franchising Management Process

• Planning involves determining the overall goal, mission, and objectives of the franchise and formulating policies and procedures.
• Organizing involves the coordination of human, financial, and physical resources.
• Directing involves achieving franchise goals through a conducive work environment.
• Controlling involves setting performance standards, appraising performance, and providing rewards or corrective action.

Key Activities Associated with Directing:

• Giving Directives through written or oral forms
• Supervising personnel with training and discipline
• Leading involves influencing others to provide effort and cooperation.
• Motivating involves understanding people and fostering a cooperative working environment.

Franchise Management Operations

• Financial records are valuable tools for making effective management decisions. These include:
  • Start-up or turnkey costs
  • Financial position for starting franchisor's system
  • Balance sheet
  • Income statement
  • Cash flow statement
  • Breakeven analysis
  • Ratio analysis
• Legal requirements of franchised operation, which include:
  • Business Structure
  • Licenses, contracts, and permits
  • Types and anticipated costs of insurance
  • Management Process

Franchise Market Players

• Franchise Broker is an independent third party who solicits prospective franchisees for franchisors.

Franchise Marketing Strategies

• Target Markets involve clear descriptions of targeted market segments or customers, taking into account consumer preferences and spending patterns.
• Product/Service Mix refers to a range of products that are sold in combination to yield greater sales than in each individual product.

Product/Service Stages (Lifecycle)

• Stage 1: Introduction sees the product or service entering the market.
• Stage 2: Growth sees rapid sales increase as the product or service gains popularity.
• Stage 3: Maturity sees the sales rate slowing and stabilizing, but remaining at a reasonably high level.
• Stage 4: Decline sees sales volume drop as demand shifts to other products.

Key Terms

• Business Image refers to the image the franchise system projects to the public.
• Convenience goods or services: frequently purchased goods that are typically low-to-competitively priced and often staples, emergency or impulse buys.
• Heterogeneous shopping goods or services: goods perceived by consumers as markedly different in quality and attributes, where price is less important.
• Homogenous shopping goods or services: goods purchased less frequently than convenience goods, that are considered highly similar, if not the same, in terms of quality.

Test your knowledge on franchising, including joint ventures and the top global franchises in 2023. Explore various franchise business types such as restaurants, hotels, and automotive services. This quiz will help you understand the dynamic world of franchising in a fun and engaging way.