Session 24 - Session 24 Economic significance of...

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Session 24 Economic significance of franchising Is growing in popularity Today roughly 2,500 franchise systems Account for about 1/3 of all retail in the U.S. History: o Many of most popular franchises, including (1952), McDonald’s (1955) and H&R Block (1958) started in the 50s Franchising Def: form of business org which a firm (franchisor) licenses a successful product, service, trademark and/or method of doing business to another firm or individual (franchisee) Franchisee typically pays o Franchisee fee (up front lump sum payment) o Royalties (% of sales) o And/or specific products and services provided by franchisor Fundamental types of franchisee systems Product and trademark franchise o F-or grants to f-ee the right to buy its product and use its trade name o –ors obtains the majority of their revenues from product sales to –ees o Typicall connects single manufacturer w/ a network of dealers and distributors Business Format Franchise o
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Session 24 - Session 24 Economic significance of...

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