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Unformatted text preview: F RANC H IS I NG F ranchise-A form of business organization in which a fi rm (which already has a successful product or service) enters in to a continuing contractual relationship with another business (or person) operating under the fi rm’s t rade name and, usually with that fi rm’s guidance, in exchange for a fee F ranchisor- T he person or business (with the successful product or service) offering or granting the franchising agreement -Franchisor owns t rademarks, business methods F ranchisee- T he person or business accepting the franchise agreement -Franchise pays for the business opportunity P roduct or T rade Name -Automobiles, Gasoline, Soft drink bottlers -Franchisor supplies product, sold by franchisee under franchisor b rand Business Format -Hotels Restaurant -Franchisor provides services including site selection, t raining, marketing, and assistance in obtaining financing, products and supplies PROF I L E OF A FRANC H ISOR -Olive Garden -Choice Hotels -McDonalds -Hyatt ADVANTAGES AND D ISADVANTAGES ADV -Brand Recognition -Construction/Site Selection D IS -Restrictions -Fees Encroachment-I own ter ri tory but franchisee sells the land to somebody else for money Benefits- L imited Capital requirements -using other peoples money ...
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- Fall '08