4.Franchisee is appointed for a specified location keeping in view the business possibility that can be developed in that area.5.Reputable franchisor attracts customers because of the general belief that the quality of the products or services belonging to a well-known name would be as good as that of similar products or services bearing the same name marketed elsewhere and for which one does not have to travel to faraway places.6.Franchisor usually provides franchisee with necessary expertise, implements, materials aswell as sales promotional supports.7.Franchisee pays from time to time a predetermined share of the profit, termed as royalty, to franchisor.8.Franchisee’s success is very much dependent on franchisor’s business integrity and aboveall customers’ confidence in franchisor’s products or services.2
Advantages for Franchisee1.There is a higher likelihood of success since a proven business formula is in place. The products, services, and business operations have already been established.2.It is easier to secure bank loan. Bankers usually look at successful franchise chains as having a lower risk of repayment default and are more likely to loan money based on thatpremise.3.The corporate image and brand awareness is already recognized. Consumers are generally more comfortable purchasing items they are familiar with and working with companies they know and trust.4.Franchise companies usually provide extensive training and support to their franchisees in effort to help them succeed.5.Many times products and services are advertised at a local and national level by the main franchise companies. This practice helps boost sales for all franchisees, but individual franchisees don’t absorb the cost.6.A franchise is a duplicate of a successful business concept. The franchisee owns the outlet, therefore, he hires his own employees and oversees the management its day-to-dayoperations. He has high stakes in the business because his money is involved.7.When one buys a franchise, he is buying an established concept that has a good record of accomplishment. The franchise is allowed the use of the company’s trademark and brandname. Because of this, the company is, in effect, giving the franchisee a license to market its products carrying a brand that is already familiar with the consumers. Many popular franchises have instant brand-name recognition and have created a loyal following among consumers. Therefore, the franchisee is getting into a business that already has a ready market.8.Although running his own business, the franchisee can tap the services of the parent company anytime he needs assistance. The services of the head office organization are available to him, too, whenever he needs help. Furthermore, many companies have field operations personnel whom the franchisor can call on to help him deal with any problem 3
he may encounter in the operation of the business. Most franchises being offered nowadays are turnkey operations (Boo).