Introduction to franchising and its importance to entrepreneurs & small & medium enterprises by Xaytkulova Sevara



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Franchising

INTRODUCTION TO FRANCHISING AND ITS IMPORTANCE TO ENTREPRENEURS & SMALL & MEDIUM ENTERPRISES by Xaytkulova Sevara

  • How to be a successful entrepreneur – a tip

WHAT IS FRANCHISING?

  • An arrangement whereby a party (franchisor), who has developed a way of running a business format/system successfully, licenses the rights to operate that format/system using his trademark, name or other IP rights to another party (franchisee)
  • The licence involves the franchisor granting a right to use the format/system, trademark, name or other IP rights in exchange for an initial fee and annual royalty.

WHAT IS FRANCHISING?

  • “Franchising allows people to go into business for themselves, not by themselves”

WHY FRANCHISE?

  • A recognised brand name.
  • Enhanced business image.
  • Consistent quality.

WHY FRANCHISE?

  • Franchises offer important pre-opening support:
    • site selection
    • design and construction
    • financing (in some cases)
    • training
    • grand-opening program

WHY FRANCHISE?

DISADVANTAGES

  • The franchisee is not completely independent.
  • In addition to the initial franchise fee, franchisees must pay ongoing royalties and advertising fees.
  • Franchisees must be careful to balance restrictions and support provided by the franchisor with their own ability to manage their business

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