The Franchise List of Businesses The Body Shop

The Franchise

List of Businesses �The Body Shop �Mc. Donalds �KFC �Terranova �Benetton �Burger King �Starbucks �Versace Calliope Liu Jo Max & Co Guess? Paul & Shark PINKO Moschino Golden Point

The Franchise �Identify the good or service provided by each, then guess what the businesses have in common.

Exploring a form of Business called a Franchise �Lots of people dream about having their own business but starting a business from scratch can be intimidating – especially for people who have limited business experience or money to invest in a business. �A franchise is an alternative way to start a business. Some features of a franchise help reduce the risk entrepreneurs face when starting a new business.

Pros and Cons of a Franchise � Pros: � Reduced risk of failure � Start-up assistance in the form of training, advice, operational manuals, and sometimes, � � � � financing On-going training and support from franchiser Association and synergy with other franchisees for help/ideas Standardized/proven product and operational systems Product or service with brand-name recognition Collective buying power Assistance with sales and marketing Research and development support Some independence operating their business. Cons: Restrictions set by franchiser (geographic, products, operations, vendors, etc. ) Franchisees must pay ongoing royalties and advertising fees. The franchiser's problems are also the franchisee’s problems (e. g. , poor image, limited advertising, supply problems, franchiser’s financial difficulties) � The term of a franchise agreement is usually limited and the franchisee may have little or no say about the terms of a termination. � Smaller profit margins � Difficult to achieve redress if franchiser fails to meet obligations � �

Discussion �What do you view as the most important reasons for your choices? �What features of a franchise reduce the risk of business failure? �How might a franchise increase one’s risk of failure?

Information re Franchises �What other information would you have looked for when selecting your franchises? �Where might you get this information? �Do you think you can trust the information provided by the franchiser? Why or why not? �There are several other sources of information that should be explored besides the franchiser. What kinds of information might these sources provide?

Selecting a Franchise �Identify and research two franchise opportunities that you think might succeed in Malta. �Record your findings on a worksheet which offers a list of questions for an investor to consider when selecting a franchise. �At the bottom of the worksheet, make a choice between the two options and defend your decision.

Reinforcement �Starting any business is a risk and there is no guaranteed success. �All an entrepreneur can hope to do is reduce the risk of failure through careful investigation prior to making a commitment to a business venture.