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

STEPS INVOLVED IN FRANCHISING?

WHAT SHOULD A COMPANY DO TO GET READY TO BE A FRANCHISEE?

• Conduct feasibility study
• Set up systems/procedures and support functions
• Study the operations manual
• Register trademarks and other IP rights

TYPES OF FRANCHISE

• Generally there are 2 main types of franchises:
• Product distribution franchises; and
• Business format franchises.

PRODUCT DISTRIBUTION FRANCHISES

• A product distribution franchise model is very much like a supplier-dealer relationship.
• Typically, the franchisee merely sells the franchisor’s products. However, these type of franchises will also include some form of integration of the business activities.

PRODUCT DISTRIBUTION FRANCHISES

• Examples of famous product distribution franchises include:

PRODUCT DISTRIBUTION FRANCHISES

• Produces the syrup concentrate

• Sells the syrup concentrate

• FRANCHISEE

• Produces the final drink

• Retail Stores

• Restaurants & F&B Outlets

• Vending Machine Operators

BUSINESS FORMAT FRANCHISING

• In business format franchises, on the other hand, the integration of the businesses is more complete.
• The franchisee not only distributes the franchisor’s products and services under the franchisor’s trademark, but also implements the franchisor’s complete method to conduct the business itself.