J Entrepreneurship Starting New Business (Buying Franchise) Sesi 8

J Entrepreneurship Franchise

J Entrepreneurship Definition According the International Franchise Organization, franchise is defined as a “A continuing relationship in which the franchisor provides a licensed privilege to do business, plus assistance in organizing, training, merchandising and management in return for consideration from the franchise”

J Entrepreneurship The franchisor perspective More rapid expansion (+) Capital (+) Image (-) Less profitability (-)

J Entrepreneurship The franchisee’s perspective Cost –Franchising Fees –Conformity to standard operating procedures –Inability to make change readily –Dependent on franchisor’s success

J Entrepreneurship The franchisee’s perspective  Benefits –Lower risk –Establish product or service –Experience of franchisor –Name recognition –Management assistance –Business plan –Start-up and marketing assistance –Proven system of operation