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Assignment 2

The document discusses franchising businesses. It outlines the steps to franchise a business, which include making the business ready, protecting intellectual property, preparing financial documents, drafting agreements, compiling manuals, and setting sales goals. The advantages are listed as reduced risk, support from the franchisor, ability to compete against large businesses, and communication with other franchisees. The disadvantages include potential conflicts between franchisor and franchisee goals, high costs, restrictions in the franchise agreement, reputation issues if other franchisees fail, and lack of flexibility.

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MUQADAR Rajpoot
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90 views

Assignment 2

The document discusses franchising businesses. It outlines the steps to franchise a business, which include making the business ready, protecting intellectual property, preparing financial documents, drafting agreements, compiling manuals, and setting sales goals. The advantages are listed as reduced risk, support from the franchisor, ability to compete against large businesses, and communication with other franchisees. The disadvantages include potential conflicts between franchisor and franchisee goals, high costs, restrictions in the franchise agreement, reputation issues if other franchisees fail, and lack of flexibility.

Uploaded by

MUQADAR Rajpoot
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Assignment: Entrepreneurship

Name: Muqadar Karamat


Roll-Number: F19-1080
Submit TO: MR Mohsin-UL-Mulk
 Explain the steps of franchising business?
What are the advantages and disadvantage of establishing franchising
business?
Franchisors earn royalties from sales. Franchisees earn money from
profits. Achieving growth in both isn't always possible, potentially causing
conflict.
How to Franchise a Business
1. Make sure your business is ready to franchise.
2. Protect your business's intellectual property.
3. Prepare a financial disclosure document (FDD)
4. Draft a franchise agreement.
5. Compile an operational manual for franchisees.
6. File or register your FDD.
7. Set a strategy to achieve your sales goals.
Advantages
Franchisees may be more talented at growing the business and
turning a profit than employees would be.
The risk of business failure is reduced by franchising. Your business
is based on a proven idea. You can check how successful other
franchises are before committing yourself. Products and services will
have already established a market share.
The risk of business failure is reduced by franchising. Your
business is based on a proven idea. You can check how successful
other franchises are before committing yourself.
The franchisor gives you support - usually as a complete package
including training, help setting up the business, a manual telling
you how to run the business and ongoing advice.

A franchise enables a small business to compete with big


businesses, more so than an independent small business, due to
the pool of support from the franchisor and network of other
franchisees

You can benefit from communicating and sharing ideas with, and
receiving support from, other franchisees in the network.

Disadvantages
Franchisors earn royalties from sales. Franchisees earn money from
profits. Achieving growth in both isn't always possible, potentially
causing conflict.
Costs may be higher than you expect. As well as the initial costs of
buying the franchise, you pay continuing management service fees
and you may have to agree to buy products from the franchisor.

The franchise agreement usually includes restrictions on how you


can run the business. You might not be able to make changes to
suit your local market.

Other franchisees could give the brand a bad reputation, so the


recruitment process needs to be thorough

The inflexible nature of a franchise may restrict your ability to


introduce changes to the business to respond to the market or
make the business grow.

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