Franchising System: Strategies and Social Responsibilities

This report provides an overview of the franchising system, including strategies for negotiation, innovation, and emotional turbulence. It also discusses the possible social responsibilities and obligations of franchisors and franchisees. The report focuses on Oxylus Networks, an IT solutions service provider in Australia.

Franchising system -
capstone assessment

EXECUTIVE SUMMARY
The report is prepared on franchising system which is promotional concept which
organisation can adopt as strategy to expand business. Oxylus Networks was established in 2018
at Australia for offering multiple types of services related to communication and technology for
the purpose of increasing productivity and profitability. It comprise security networks for
targetting market as well as uses its potential to meet needs concerned with technology in best
possible manner. The report covers information about company and franchising system,
strategies for innovation, emotional turbulence along with negotiation. Further, discussion is
done on possible social responsibilities of franchise system in business environment. It also
highlights obligations of both franchisor and franchisee along with some of strategies to resolve
disputes. At last, it describes future of organisational franchising system.

Table of Contents
EXECUTIVE SUMMARY.............................................................................................................2
INTRODUCTION...........................................................................................................................1
Overview of company..................................................................................................................1
Strategies for negotiation, innovation as well as emotional turbulence ......................................1
Possible social responsibilities involves in franchise system......................................................3
Obligations of franchisor and franchisee along with dispute resolution strategies.....................5
Future of franchise system ..........................................................................................................7
CONCLUSION ...............................................................................................................................8
REFERENCES................................................................................................................................9

INTRODUCTION
Franchising is said to the method of distributing commodities and services involving
franchisor and franchisee. In this franchisor is the one who establishes trademark and trade name
of brand or business system (Bellin, 2016) . At same time, franchisee is the one who pays royalty
or initial fee for obtaining right to do business under name or system of franchisor. In
competitive as well as modern era, franchising has become most desirable prospect of business
to accelerate development services addition to trade of company. To understand about
franchising system, Oxylus Networks is considered company. It is an Information Technology
Solutions service that provides facilities in Australia to local or mid market customer segment.
The entity has entered into the market in 2018 and is popular professional service provider in the
country.
The report covers overview of organisation, strategies related to negotiation, emotional
turbulence along with innovation. It also includes possible social responsibilities that are part of
franchise system, obligations of franchisor and franchisee together with dispute resolution
strategies. At last, it highlights future of franchise system.
Overview of company
Oxylus Networks is communication technology providers which was founded at
Australia in 2018. The company is capable to meet demanding technology related tasks on time
and in cost effective manner as it have team of skilled professionals together with immediate
access to experts of industry. It utilises its capabilities along with services for tailoring
customised business solutions to clients. It offers multiple services including wide area network,
data network solutions, local area network, cloud computing services, etc appropriately which
aids the company to enhance its profit levels. Its networking solutions have capability to
comprehending positive outcomes that are expected by consumers for as well as its technical
capacities to cover expectations into effective infrastructure solution. The management have
decided to adopt Multi Unit Franchise in which it will bring in operating principals for running
each locations. The growth of the system is encompassed on area develop franchise as well as
incremental franchise. Also, the entity have adopted cost leadership strategy for influencing
customer attention on solutions through providing them with high quality services at lower cost.
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Strategies for negotiation, innovation as well as emotional turbulence
Negotiation
It is crucial concept in franchising system as it strike a balance for franchisor and
prospective franchisee while maintaining complex protections (Perrigot, Basset and Meiseberg,
2016). It is important that franchisor are ready as well as prepared for responding towards
negotiation requests from prospective franchisees. Negotiations only occur once in franchising
agreement. In case with Oxylus Networks, negotiation is done with clients and prospective
franchisee so to expand the business through allowing it to replicate successful model
consistently. The key negotiation strategies that can be adopted by Oxylus Networks as
franchisor are as follows:
Distributive negotiation: The term distributive refers to giving out and scattering of
value. Distributive negotiation strategy is the tactics of franchise system in which one party gains
when other party losses something. In case of Oxylus Networks, it can use the strategy to
negotiate about resources that are money, assets, people, technology, etc with prospective
franchisee.
Integrative negotiation: In the negotiation strategy, involved parties work and perform
together for finding and providing solution which satisfies concerns of each and requirements of
clients (Shaw, 2017). The strategy implies joining of and cooperation of two companies to attain
something together. In context to Oxylus Networks, objective of the entity is to attain
competitive advantage and make sustainable position in the industry. It can achieve the objective
by using the strategy in which it negotiates with other companies that are its franchisee for
issues and finds solutions for problems of both.
Innovation
It is the concept to translate an idea as well as invention into product or service which
develops values (Rehak and Rehak, 2018). It is creation, development along with executing of
new product or service with objective of improving effectiveness, efficiency and competitive
edge. By innovation, it means changing organisational business model addition to making
changes in current environment for delivering better services. In context to Oxylus Networks,
innovation in its services helps the business to achieve success. Managers of the entity uses
creative ideas together with innovation so that the business can stand out from rivalry and
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develop strong brand position. To attain it, following are some of innovation strategies that can
be adopted by administrators of Oxylus Networks:
Active innovation strategy: It comprises defending existing technologies as well as
markets at the time of preparing to respond quickly after proving markets and techniques. As
Oxylus Networks have incremental innovation with in- house executed research and
development, application of active innovative strategy could assist to hedge its bets and defend
competitive technologies.
Stealth innovation strategy: It includes application of new technology addition to
processes to organisational current market (Pathan, Haq and Williams, 2016). The innovation
strategy is stealth in nature as newer tech are not inferior to current market technology. By using
stealth innovation strategy, managers of Oxylus Networks can avoid alerting competitors to
pending services launch along with another business initiatives.
Emotional turbulence
It is irregular atmospheric motion that is characterised current ups and downs in entity. In
franchising system, franchisor and franchisee experience emotional turbulence in many ways. In
association to Oxylus Networks, strategies for emotional turbulence are as follows:
Attention re-deploymnet: In this strategy, organisational managers divert attention of
employees and franchisee from most stressful situational aspects. If Oxylus Networks faces
circumstance of emotional turbulence then it can adopt the strategy so that its franchisee are able
to focus on other things and makes clarity on what matters the most.
Cognitive change: The strategy offers greatest opportunity to companies to regain its
equilibrium addition to respond effectively to emotional turbulence (Borsack, 2019). In case with
Oxylus Networks, using the strategy and making adjustments in current workings, reactions and
other aspects can help in dealing with emotional turbulence in the market.
Possible social responsibilities involves in franchise system
Franchise system is one of most crucial aspect for enterprise to expand and attain growth
as It provides multiple opportunities to franchisor to initiate with quick development.
Organisations uses franchising system for the purpose of attaining quick growth and building
position in completely new market (Riedl and Schwenken, 2018). The prime reason for which an
enterprise enters into franchising system is to acquire capital, motivated management, reducing
risk and speedily growth. In context to Oxylus Networks, the administration have done detailed
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analysed of the situation to use franchising system for the purpose of expanding its operations. In
doing so, there are many number of possible social responsibilities that are related to franchising
system. Some are as follows:
Supporting community: It is social responsibility of franchise system to support
community at all level. Franchise system supports various vital programs across the country
which leads to benefiting communities. A leading franchisor have franchisees throughout the
country that are extremely involved in local communities along with giveback programs. In case
with Oxylus Networks, the possible social responsibility is to help supporting human trafficking
activities together with bringing education to audiences about that addition to human
exploitation. Its franchise in other countries have responsibilities to encourage support to
community as well as provide resources to them promptly.
Innovation: Franchise system also have social responsibility to bring innovations in
market which reduces impacts on planet for coming decades (Trajković and Stanković, 2017).
The initiative ranges from leveraging power of globe to providing advance techniques to
communities across the world. For example, Oxylus Networks is IT solution service provider
that serves to local or mid customer market. As franchisor's perspective, the company have
responsibility to serve innovative systems which meets needs of society as whole. Innovation for
society is all about innovations that are undertaken by companies in products, services,
technologies, business models and so on to address environmental together with social changes
that helps the society to preserve its resources.
Operating ethically in society: Franchising system have social responsibility to perform
its operational activities in ethical manner. The social responsibility is concerned with frequently
donating money to charities which improves economy and social situations. Moreover, it is not
only about donating money rather investing in community as well as participate more in local
projects as possible. As a franchisor, Oxylus Networks have social responsibility to operate or
perform all of its activities is ethical manner. The main intention is to provide proper support to
community in many ways that are beyond just investments or employment generation (Bouse,
2016). Through investing in community, Oxylus Networks encourages loyalty from manpower
whilst benefiting from improved support system. It also serves as way to represent organisational
commitment to community by demonstrating that it values community more than providing a
workforce or revenue source.
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Reducing carbon footprints: Another possible social responsibility related to
franchising system is to reduce carbon footprints. In general, reducing carbon footprints means
consuming less energy, purchasing recycles paper or equipments, etc. Oxylus Networks have
social responsibility to reduce carbon footprints with objective for aero waste, zero emission and
commitment for conserving water. The company must actively ensure that it set strict
international labour policies so to protect rights as well as safety of people that works in its
franchising system (Flores Villanueva and Gaytán Ramírez, 2020). It must also commit to
provide healthy living initiatives and use recycles IT related equipments to reduce carbon
footprint and its impacts on society. Also, it can lower the CO2 emissions through considering as
well as actively minimising impacts of its IT related solutions and substituting alternative
substantial for conventional solutions.
Obligations of franchisor and franchisee along with dispute resolution strategies
Obligations:
Obligation is course of action which an individual or organisation is required to take
either morally or legally. They limit freedom and are perceived as constraints for business. In
franchising system, two parties are involved, one is franchisor and other is franchisee (Germann,
2019). In context to Oxylus Networks, it is a franchisor that is expanding globally by granting
license to other party so to conduct practices of business under its name. Franchisor owns overall
rights addition to trademarks of business and permits other party to make effective use of
trademarks along with rights to conduct business. The key obligation of franchise system is to
attain higher growth together with success by devising and executing most suitable strategy. In
context to franchisor, some of the obligations are as follows:
 As a franchisor, Oxylus Networks have obligation to improve its systems over time by
properly using research along with technological advancements. The company must not
install outdated systems as it will unnecessarily frustrate or create confusions among its
parties and hinder their practices (van den Berg, 2019).
 It also have obligation to develop, execute and maintain proper support for its
franchisee and employees so that these businesses are able to develop, make profit and
provide quality of services to target customer market.
 Brand advertising is also an obligation of franchisor in which it takes key steps to
protect the brand along with associated trademarks. For Oxylus Networks, protecting
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brand is just not limited to preventing unauthorised parties to use its name. If brand is not
advertised properly then it impacts on position of franchisor's entire business.
Franchisee is the small owner of business that operates a franchise. The obligations of
franchise are as mentioned:
 Franchisee have obligation to pay all types of fees on time that are related to use of
brand and system of others (Picciotti, 2017). Fees are not restricted to upfront costs. So,
all franchisees are obliged to pay fees and other payments on time.
 Maintaining open communication with franchisor is essential obligation of franchisor
because they requires to support all the decisions for success. Any prospective franchise
with any kind of questions must contact franchisor for help as well as information.
 All franchisee have obligation to work as per system and business model of
franchisor. In context to Oxylus Networks, its franchisee are obliged for taking care of
location duties including sales force hiring along with local accounting.
 Franchisee should understand and work as per aspects of franchising system with the
purpose of meeting other responsibilities, for this they should be prepared to put huge
time at the time they start out. So, putting in time is ongoing obligations of franchisee as
they are obliged for developing business through franchisor (Hager and Martins-Tonks,
2016).
Dispute resolution strategies
Dispute resolution is said to the concept which resolves conflicts or claims among parties
(Breen, Abduljawad and Font-Guzmán, 2019). In context to Oxylus Networks, following are
some of dispute resolution strategies that can be used to resolve conflicts with other party:
 Negotiation strategy: It is most effective strategy to settle differences or disputes. It is
back as well as forth communication among parties of conflict with the purpose of trying
to find suitable solution. Bys using negotiation, managers of Oxylus Networks can solve
any type of dispute with the person or company. It allows the business to directly
participate in decisions that are affecting practices.
 Accommodating strategy: In this strategy, one person of company gives wishes to other
that are part of conflict (Archer, 2019). In respect to Oxylus Networks, using
accommodating strategy for solving disputes among manpower of with franchise will
help in taking key steps to satisfy the concerns and demands of others.
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Future of franchise system
Oxylus Networks is reputed as professional service provider of wide area network, cloud
computing services, data network solutions, etc to organisations along with mid market customer
groups. Its multi franchise system is a good decision for expand the business activities to deliver
professional services related to planning, designing, setting and supporting IP network
infrastructure solutions. It offers consultancy to clients and customers for business case
assessment, solution designing, implementation and maintaining contacts for all organisational
network concerned needs with access to accurate knowledge along with information. With
franchise system, the company have great future ahead as it can expand its facilities or services
as green franchising (Nasri, Collazzo and Welsh, 2020). It is also known as sustainability or
stock control which ensures that appropriate level of inventory are maintained by entity for the
purpose of meeting customer requirements without delay at the time of keeping costs related to
holding stock to minimum. Green is new trend overall, but the levels to which initiatives are
taken generally comes in multiple shades. The entity is earth friendly solution provider and have
made green as a priority since its establishment. In future, the entity will sustain on the globe
through using the franchising system as it offers environmental friendly services or solutions
through franchisee. All its franchisee will be part of green movement presently sweeping via the
franchising industry. By recreating the success in multiple locations, the entity as franchisor have
bright future as it can quickly grow its revenues together with enhance its business's
sustainability (Di Lernia and Terry, 2019).
Moreover, it is not a secret that information technology is changing rapidly and
considering this, the franchising system will lead to attain objectives in future. Computer and
Information Technology services is also future of franchising system of Oxylus Networks as it
will be used as business operations which stresses role of unified communications with
franchisee and clients. In future, franchising system will converge audiovisual along with
telephone networks of the company with computer networks by single unified cabling system.
The upcoming trend will encourage the organisational franchising system to work methodically
for updating all its locations with updated information and technology (Park and Jang, 2019).
Business within business is also future of multi franchising system as it assist in opening
UPS franchisor in established business with direct access to occupational group who already
operate and are popular in their own field. These types of businesses are well established and
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have huge profitability chances. This gains huge attention of consumers and makes them make
connections or relations more convenient. The trend is win win for the franchising system as it
meets other requirements of consumers that are not related to IT solutions and will help the entity
to tap into other field (Germann, 2019.). Further, the franchising system of Oxylus Networks
continues to heat up and many changes are taking place which will build it more stronger along
with more sustainable franchisor. Through new technology addition to business models, the
company have great future in the industry.
Theory of franchising forecasts that organisation with huge stock turnover as well as low
labour turnover intensity would have chances to franchise fewer outlets as business model. The
situations determines organisational choices for franchising or wholly owned outlets. By using
franchising theory, Oxylus Networks can raise capital cheaper that other arrangements for
stimulating growth. Moreover, the theory will help the franchisor to use franchising powers as
system for building customer loyalty and retaining them for longer durations.
CONCLUSION
From the report, it is concluded that franchise system plays key role for company to
achieve growth and success in competitive world. A franchisor uses various types of strategies to
build a brand name and expand in other markets or nations. In context to negotiation, a
franchisor can use Distributive negotiation and Integrative negotiation strategy. While,. In
Innovation, key strategies are active innovation strategy along with Stealth innovation strategy.
In context to Emotional turbulence, franchisor can use Attention re-deploymnet and Cognitive
change. Possible social responsibilities that are part of franchise system includes supporting
community, innovation, operating ethically in society and reducing carbon footprints. Key
obligations of franchisor are to improve its systems with time, advertising brand and develop,
execute and maintain proper support. At same time, franchise are obliged for paying all kinds of
fees promptly, maintaining open communication with franchisor, putting things on time and
work as per system or business model of franchisor. Negotiation strategy and accommodating
strategy are essential ones that are used in company for resolving disputes. Green franchising,
information technology and so are some of future of franchising system that is adopted by the
entity.
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REFERENCES
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van den Berg, C., 2019. Tax implications of franchising arrangements: franchise
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