franchisor

Examples of franchisor in the following topics:

• Disadvantages of Franchises

  • A franchise agreement can also have disadvantages for both the franchisor and the franchisee.
  • While there are many advantages for the franchisor in entering a franchising agreement, some of the potential risks are:
  • - Franchisees have to pay a significant percentage of their revenues to the franchisor: On top of the upfront money needed to start a franchise, the franchisee must pay fees and royalties to the franchisor.
  • - Uninterested franchisors: Some franchisors may have little interest in their franchisee's success and may be more interested in just collecting the fees associated with the franchise.
  • - Strict product rules: Franchisees experience less flexibility to use their own initiative due to restraints from the franchisor.

• Franchise Agreements

  • A Franchise Agreement is a legal, binding contract between a franchisor and franchisee, enforced in the United States at the State level.
  • A Franchise Agreement is a legal, binding contract between a franchisor and franchisee, enforced in the United States at the State level.
  • The content of a franchise agreement can vary depending on the franchise system, the state jurisdiction of the franchisor, franchisee, and arbitrator.
  • Franchisors Services, such as: Administration, Collections and Billing, Consultation, Marketing, Manual, Training
  • Transfer of License, such as: Consent of franchisor, Termination of license, Termination by licensee, Termination by licensee

• Advantages of Franchises

  • A franchise agreement can have many benefits for both the franchisor and the franchisee.
  • Franchisors benefit from franchise agreements because they allow companies to expand much more quickly than they could otherwise.
  • Franchisors receive royalty payments that are set as a percentage of profits.
  • In addition, the franchisee gets training and head office support from the franchisor; this may be essential if the franchisee is new to running a business and has no experience or business knowledge.
  • The franchisor offers a great deal of business experience that would take years for the average business person to acquire .

• Franchises and Licenses

  • A franchisor will develop the brand, produce goods and develop marketing campaigns for its products.
  • A franchisee will then purchase the rights to sell the franchisor's products in a given area and benefit from the franchisor's marketing efforts.
  • The franchisor makes money by selling rights to franchisees, while the franchisee profits by selling directly to customers.
  • If a franchisee makes periodic payments to the franchisor over the contract's term, the franchisee does not record a franchise asset.

• Technology in Franchises

  • The use of new technologies, such as social media, apps, and smartphone connectivity, can help franchisees and franchisors to get the most out of their business.

• Types of Franchises

  • While there are many ways to differentiate between different types of franchises (size, geographic location, etc), we will be looking at how different franchisors allow franchisees to use their name.

• The Business Plan

  • Elements of a Business Plan: Cover sheet, Executive summary (statement of the business purpose), Table of contents, Body of the document, Business Description of business, Marketing Competition, Operating procedures, Personnel Business insurance, Financial data, Loan applications, Capital equipment and supply list, Balance sheet Break-even analysis, Profit and loss statements, Three-year summary, Detail by month -- first year, Detail by quarters -- second and third year, Assumptions upon which projections were based, Pro-forma cash flow, Supporting documents, Tax returns of principals (partners in the business) for last three years, Personal financial statements (all banks have these forms), Copy of franchise contract and all supporting documents provided by the franchisor (for franchise businesses), Copy of proposed lease or purchase agreement for building space, Copy of licenses and other legal documents, Copy of resumes of all principals, Copies of letters of intent from suppliers, etc.

• Types of Marketing Channels

  • An example of dual distribution is business format franchising, where the franchisors, license the operation of some of its units to franchisees while simultaneously owning and operating some units themselves.

• Small-Business Structure

  • Some franchisors also sought to consolidate, buying out other units of the same business and building their own networks.