Franchising: Advantages and Examples of Successful Franchisees

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Introduction
Franchising is identified as an established business expansion strategy which has proven
to deliver significant growth along with an arguably reduced risk. Some striking examples of
franchising are McDonalds, KFC, Singer and Coca-Cola (Hoffman, Munemo and Watson
2014,pp. 5-8). Sunde and Siebert (2014) have noted that generally of franchising organisation
licenses its trademarks copyright skills expertise along with established business model to
franchisees. These franchisees tend to adopt that business model which includes the brand and
then change to penetrate into new markets. Franchising is regarded as a long-term collaboration
and companies who intend to have a robust position in the industry must identify the true
attributes of the collaboration along with the accountabilities of each partner in the business.
Franchising further facilitates businesses to extend their operations without disseminating
managerial resources across several business units. According to Burns (2016, pp.270-273), a
business owner may have the intention to retain his or her own operations within the small all
industry and indulge into limited business operations. Authors have noted that executive business
operations over few Limited outlets show a propensity to consume business resources. The
following essay when analyze the effectiveness of franchising a business by shedding light on its
advantages and examples of franchisees which have been successful in their individual sectors.
Discussion
Franchising has contributed substantial attraction for expanding business into overseas
markets specifically those which draw divergences as most International markets are two
different choices home market (Ganebnykh et al. 2017,pp. 08082). By using indigenous
franchisees franchisor is tapping into to local business knowledge which tends to prove the

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business capacity to obtain local population. However, Ozkan-Canbolat, Bas and Cafri (2014)
have noted that the cost of expansion for the franchisor is usually restricted to the cost of
franchise recruitment knowledge development training and assistance before the expansion.
Furthermore, Sokolinskaya and Kupriyanova (201) have claimed that franchisees in order to
invest their individual equity as well as borrowed financial resources in equipments, fixtures,
fittings, property, inventory as well as the working capital essential to establish franchise unit.
While understanding the meaning of franchise network, it is important to shed light on
one of the renowned fast-food restaurants across the world that is McDonald's. Reports of
Krueger and Ashenfelter (2018) have noted that Mc Donald’s executes its business operations on
the market as one of the franchise icons. Thus, the fast food enterprise has been recognised as a
leader amongst its rivals in the market, even though with well-established and renowned
franchise brands. However by purchasing the franchise license an entrepreneur decides to
conduct business at individual’s risk, but under the trademark of the franchisor. According to
Silva et al. (2016), deciding to operate under a renowned brand, any entrepreneur aims on
strategically ascertaining additional customers and drastically reducing the risk of bankruptcy. It
is imperative to note that the key accountability of the franchisor must rely on licensing the brand
and further assure the shift of knowledge on executing the business on a permanent basis
throughout the period of the agreement. Drawing relevance to this, the major liability of the
franchisee is to follow regular network-wide regulations for executing business operations and
paying franchise fees (Hardaker 2018,pp.225).
There are mounting evidences of principles which are essential to take into account while
explaining franchise. At this juncture, both parties are required to obtain knowledge of these
standards and follow them systematically (Krueger and Ashenfelter 2018,pp. 7-10). However, it

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is important to shed light on some of the benefits and advantages of franchising a business.
Structure of franchise can certainly be striking option for local and global business organisations.
On the other hand, the number of advantages it is often a striking option looking to start for
business expansion regardless of the risks of financial loss. Franchise offers a legal as well as
institutional structure thus allowing detailed regulation over the marketing and operational
programs of the business unit. According to Dada, Jack and George (2016), if an entrepreneur is
of the supposition that it is challenging for each unit to achieve desired goals and follow
suggested marketing as well as operational strategies, at this juncture, franchising serves as one
of the robust methods of accomplishing the particular objective.
In the process of franchising, the franchise model typically incorporates costly franchisee
input along with innovative participation by franchisees. According to authors, as all of the
participants are recognized as vital part of a single “system” with a general identity, franchisees
show higher propensity to contribute to the efforts of expanding the business with proper
operation of the entire enterprise. Comprehensive studies of Brookes, Altinay and Aktas (2015)
have claimed that through effective franchising, companies are able to produce new ideas along
with alerting the franchisor regarding cases of operational non-compliance issues created by
other franchisees in the systems. Nonetheless, aligned to this area of advantage is a notion which
tends to develop amongst franchisees, while taking into consideration needs and demands of
consumers belonging to comparable sections. Thus, as per the view of author, franchise if being
efficiently directed and managed can develop a sense of collaboration and positive partnership
which can benefit the entire system in the future. Sokolinskaya and Kupriyanova (2015) have
cited the example of famous retailer of the UK, Tesco which has proficiently taken franchise
route in global market. Reports of authors have mentioned that Tesco has extended its chain of