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Concept of Becoming a Franchisee

   

Added on  2020-03-15

19 Pages3593 Words154 Views
Franchising716FRANAQF Level 9ASBThe Raw Kitchen FremantleWord count:30001

Executive SummaryThis Report explores the concept of becoming a franchisee as compared to becoming an individual business owner or entrepreneur. It begins by introducing the franchising topic through a historical background and defining major terminologies. The report then proceeds to explore the potential benefits and shortcomings of becoming a franchisee as compared to being a business owner to establish which option would b better between retaining an individual business and purchasing a franchise. The report then explores the experience as a franchisee as compared to being an entrepreneur, my attributes including characteristics, abilities, resources, and preferences, Identifies the major issue that could arise when buying a franchise and gives an analysis of financial and legal risks as well as obligations. The report concludes with an overview of the expected future developments in the industry and their impact on me2

ContentsExecutive Summary....................................................................................................................21. INTRODUCTION...................................................................................................................4THE ADVANTAGES AND DISADVANTAGES AS A FRANCHISEE COMPARED TO AN INDEPENDENT BUSINESS OWNER..............................................................................5Advantages.................................................................................................................................5Disadvantages.........................................................................................................................7WHAT IT MIGHT BE LIKE BEING A FRANCHISEE INSTEAD OF AN INDEPENDENTENTREPRENEUR.....................................................................................................................8PERSONAL CHARACTERISTICS, ABILITIES, RESOURCES AND PREFERENCES.....9WHAT COULD GO WRONG WHEN BUYING A FRANCHISE.......................................11LEGAL AND FINANCIAL CHALLENGES AND OBLIGATIONS....................................12Legal challenges...................................................................................................................13Financial challenges.............................................................................................................13Obligations of the franchisee................................................................................................14Obligations of the franchisor................................................................................................14IMPACT OF FUTURE DEVELOPMENTS IN THE INDUSTRY OR BUSINESS ON ME15CONCLUSION........................................................................................................................16Reference list........................................................................................................................183

1. INTRODUCTIONThere are many forms of business options available to business people. A person may choose an option based on its relative advantages and disadvantages over other existing forms of business. Examples of forms of business are being an independent Entrepreneur and Franchising. Franchising is one of the majorly used forms of business which dates back to the19th Century in America. The form of business was formed basically to help American business owners establish an efficient distribution channel (Webber,2013). The concept has since spread to other parts of the world. Among the World’s top franchises McDonald’s, 7-Eleven Inc., The UPS Store, Dunkin’ Donuts and Dairy Queen among others. Franchising involves a Franchise, Franchisor and a franchisee. Franchising is a continuous relationship between a franchisor and a franchisee in which the franchisor provides the franchisee licensed privileges to do business and offers training, assistance and products in exchange formoney. It, therefore, involves the willingness of the franchisor to grant rights of usage of his brand to the franchisee. The agreement by both parties to enter into an agreement that is mutually beneficial and legally binding and the willingness of the franchisee to pay fees and other considerations for the privileges obtained through the agreement (S,2009). On the hand, entrepreneurship is the ability and willingness to start and manage a business venture 4

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