Franchising: Starting, Developing, and Managing Networks

Franchisor-Franchisee Relationship

• Course aims to explore the dynamics between franchisors and franchisees, focusing on mutual responsibilities and expectations.
• Main focus is on understanding how both parties can effectively collaborate for success.

Evaluation of Franchising Opportunities

• Specific attention is given to assessing the potential profitability and sustainability of franchising options.
• Students learn to identify key performance indicators that signal a successful franchise opportunity.

Target Student Demographic

• Designed to appeal to aspiring entrepreneurs, business students, and individuals interested in franchise ownership.
• Aims to attract those looking to understand franchising as a business model.

Essential Understanding of Franchising

• Students need to comprehend fundamental concepts, including legal frameworks, operational structures, and market implications related to franchising.
• Importance of recognizing franchising as a strategy for business expansion and brand distribution.

Scope of the Course

• Not focused on the specific operational tactics of running a franchise, such as daily management or marketing strategies.
• Excludes in-depth guidance on independent business management outside of the franchising context.

Franchising Definition

• Franchising is a business model enabling individuals (franchisees) to operate under the established trademark and business systems of another entity (franchisor).
• Involves licensing agreements that authorize the use of franchisor's brand and operational methods.

Franchisee Role

• A franchisee is a person or entity that purchases the right to operate a franchise under the brand and guidelines established by the franchisor.
• Responsible for adhering to the franchisor’s systems and processes while managing daily operations.

Common Franchise Terms

• Franchise Agreement: Legal document outlining terms, responsibilities, and obligations of both franchisor and franchisee.
• Royalty Fees: Ongoing payments made by the franchisee to the franchisor, typically calculated as a percentage of revenue.
• Initial Franchise Fee: Upfront payment made by the franchisee to gain rights to operate under the franchisor’s brand.

Franchisee Obligations

• Franchisees must comply with operational standards, quality control measures, and marketing guidelines set by the franchisor.
• Responsible for payment of royalties and adherence to the franchise agreement.

Franchisor Role

• The franchisor provides support in areas such as training, marketing, and operational assistance to franchisees.
• Maintains control over brand standards and ensures consistency across all franchise locations.