1Introductionto EntrepreneurshipENTR 2101Fall 2013FranchisingInstructor: Dr. J. Kevin Toomb
22ENTR 2101 Exam 3 TopicsTopicReadingsFranchisingIntellectual Property Importance & Protection Section VICreating a Smart Start-Up TeamSection VIIISmart Marketing and Sales Section IXSmart Start-Up Growth PotentialSection X12/11Exam Three (8:00– 10:30PM)FinalExamWeek
15-3Introduction to FranchisingNearly 910,000Franchise outlets operatein the U.S.A.Franchises account for 1/3of all retailsalesin the U.S.A.Many of the most popular Franchises,including KFC(1952), McDonald’s(1955),and H&R Block (1958), started as early asthe 1950s.
15-4FranchisingFranchisingis a form of business organization in which a firm that alreadyhasa successfulProduct or Service (Franchisor) licensesits Trademark and method of doing business to another business or individual (Franchisee) in exchange for a FranchiseFeeand an ongoingRoyaltyPayment.
15-5TwoTypes of Franchise Systems1) Product and Trademark FranchiseAn arrangement under which the Franchisorgrants to the Franchiseethe rightto buyits productsand useits tradename.This approach typically connects a singlemanufacturerwith a networkof dealersor distributors.•Example: General Motors has established a network of dealers that sell GM cars and use the GM Trademark in their advertising and promotions.
15-6TwoTypes of Franchise Systems2) Business Format FranchiseAn arrangement under which the Franchisorprovides a formulafor doing business to the Franchisee, along with training, advertising, and other forms of assistance.Fast-Foodrestaurants, ConvenienceStores, and Motelsare well-known examples of Business Format Franchises.
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