Unlike starting the business from scratch, franchising involves making an arrangement of using the name, brand, product, services, and trademark of a business that already exists. The owner of the business is the franchisor while the franchise interested party is the franchisee who receives the franchise license. The franchisee pays an initially agreed fee and other continued royalties to the franchisor (Salar and Salar, 2014). The franchisee should follow the policies related to the mode of conducting business which is outlined in the agreement. However, the franchisor has offer marketing and technical support to the franchise. This paper will focus on analyzing three franchising businesses from the list of 2018 Franchise 500 Ranking in entrepreneur.com. These franchise include KFC US LLC which is global, Two Maids & A Mop which home-based opportunity, and CPR Cell Phone Repair which is a domestic franchise.
First, KFC franchise is a fast chicken food dealer operating more than 19,500 outlets in estimates of 115 domains and nations. It is ranked as the second largest big eatery network in the world. According to the organization figures, on day by day basis, KFC serves more than 12 million clients. Considering its reputation in the global market, it provides a feasible franchising opportunity in the global markets. Further, KFC's franchise is likely to benefit from the broad promotion activities that are done to keep the brand in shoppers' psyches. Lastly, KFC is a pioneer in drawing-in and connecting with clients using online networking.
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Two Maids & A Mop is the second franchisor that provides a home-based franchise business opportunity. The firm operates in a residential cleaning industry. It expertizes in developing a territorial map based on the number of total households. As a franchisor, it assesses the most efficient territory boundaries using statistical data such as personal financial situations, and local economic prospects and logistics issues. A franchisee of the Two Maids & A Mop receives a ten year of exclusive rights in a designated territory. From the franchisor, the franchisee benefits from ready market research and linkage with the customers.
Third, CPR Cell Phone Repair provides franchise business opportunities. It has dominated the mobile device repair industry and considering the current advancement in phone technologies, it occupies an untapped opportunity in the global and home market. The franchise model of this firm provides the franchisee with retail outlets and establishments by employing the service staffs and technicians to run the business. Further, the franchise will benefit from being uniquely positioned to capitalize on market growing gadget dependency.
Although buying a franchise is a viable and an alternative means of starting a business, it has some advantages as well as disadvantages. Among the advantages, it provides an opportunity for small business owners to benefit from a big business network. Running a franchise, there are no skills or experience required as the franchisor provides with the relevant training required to operate the business model. Similarly, the chances of succeeding in the franchise are higher than starting up a business. The risk is low as the capital required is low and thus making it easier to finance. On the franchise disadvantages, this business if more of a formal agreement with a franchisor rather a partnership (Zindiye, 2018). Thus, it is the franchisor who dictates how to run the business. This provides a very little room for creativity and expansion. The franchisee operates with the limitation of the location of operation, the supplier to use and the products to sell. And in cases where a bad performance emerges from a single franchise, it affects the reputation of other franchises. Although franchising is seen as a simple means of starting a business, it provides no guarantee of success.
References
Salar, M., & Salar, O. (2014). Determining the pros and cons of franchising by using swot analysis. Procedia-Social and Behavioral Sciences , 122 , 515-519.
Zindiye, S. (2018). Success Factors of Franchise Entrepreneurs Operating in a Volatile Business Environment: A Case of the Fast Food Industry Harare, Zimbabwe. The Social Sciences , 13 (4), 908-915.
