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15-1Chapter15FranchisingBruceR.BarringerR.DuaneIreland
6-2ChapterObjectives
1of2Explainfranchisingandhowitdiffersfromotherformsofbusinessownership.Describethedifferencebetweenaproductandtrademarkfranchiseandabusinessformatfranchise.Explainthedifferencesamonganindividualfranchiseagreement,anareafranchiseagreement,andamasterfranchiseagreement.Describetheadvantagesofestablishingafranchisesystemasameansoffirmgrowth.
15-3ChapterObjectives
2of35. Identifytherulesofthumbfordeterminingwhenfranchisingisanappropriateformofgrowthforaparticularbusiness.6. Discussthefactorstoconsiderindeterminingifowningafranchiseisagoodfitforaparticularperson.7. Identifythecostsassociatedwithbuyingafranchise.8. Discusstheadvantagesanddisadvantagesofbuyingafranchise.
15-4ChapterObjectives
3of39. Identifythecommonmistakesfranchisebuyersmake.10. DescribethepurposeoftheFranchiseDisclosureDocument.
15-5IntroductiontoFranchisingIntroductionFranchisingisgrowinginpopularity.Nearly910,000franchiseoutletsoperateintheU.S.Franchisesaccountfor1/3ofallretailsalesintheU.S.HistoryTheword“franchise”comesfromanolddialectofFrenchandmeansprivilegeorfreedom.Manyofthemostpopularfranchises,includingKFC(1952),McDonald’s(1955),andHRBlock(1958)startedasearlyasthe1950s.
15-6WhatisFranchising?FranchisingFranchisingisaformofbusinessorganizationinwhichafirmthatalreadyhasasuccessfulproductorservice(franchisor)licensesitstrademarkandmethodofdoingbusinesstoanotherbusinessorindividual(franchisee)inexchangeforafranchisefeeandanongoingroyaltypayment.Somefranchisorsareestablishedfirms(likeMcDonald’s)whileothersarefirst-timeenterprisesbeinglaunchedbyentrepreneurs.
15-7TwoTypesofFranchiseSystems
1of3ProductandTrademarkFranchiseAnarrangementunderwhichthefranchisorgrants
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