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



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Franchising

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.

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