MKT 633.1 - Case Study: Analyzing Herfy's Franchising Model

This case study analyzes Herfy's franchising model, providing an in-depth look at its operational structure and requirements. It begins with a definition of franchising and its benefits, specifically within the context of Herfy's business strategy. The study details the advantages of franchising with Herfy, including brand recognition, market knowledge, and operational support. It outlines what Herfy offers its franchisees, such as intellectual property rights and training programs, and what it expects from its partners, including business management and financial commitments. The case study also lists the selection criteria for potential franchisees, emphasizing the importance of financial stability, market experience, and a commitment to customer service. Overall, the case study provides a comprehensive overview of Herfy's franchising model, its benefits, and the requirements for potential franchisees, offering valuable insights into the fast-food industry and business development.

Case
CASE STUDY - HERFY
MKT 633.1
Mohammad Amimul Ehsan
ID - 2025299660

1. What is franchising?
Basically, franchising is a business partnership between an established company (Franchisor) and an
independent second party (Franchisee). This occurs when a firm wants to expand their business and to
cover more ground along with customers. Franchising is governed by a legal contract between the parties
where the franchisor permits the franchisee to use his trademark, logo and confidential business methods
and the franchisee agrees to follow certain restrictions and methods that how the business will run. This
concept gives the franchisee to start a business which is already in place and at the same time they get
hands on guidance from the franchisor who has already carried out the first phase pilot operations which
serves as a blueprint. It eliminates many risks that are associated with a normal start up business.
2. List the benefits of franchising.
Benefits of having a Herfy franchising –
Brand – In the GCC Herfy has a strong brand reputation and identification. This awareness is expanding
even more with their franchisee expansion in Asia & Beyond.
Track Record – Operating in the fast-food sector for more than 40 years gives you a stable track record of
results along with the notion that we are young in terms of innovation & creativity.
Knowledge of Local Markets – As they have years of experience in this sector their highly experienced
operation team has the sound knowledge of the local markets and their ever-changing trends along with
pricing to maintain the international standard.
Bakeries – Since 1982, Herfy bakeries made a strong reputation because of its investment in technology
and highly skilled staff. This combination has helped Herfy to build the brand awareness and loyal
customers over the years.
Meat Processing Plant – The Meat processing plant (Operating w/ International Standards ISO
22000:2005) allows for better control of quality, cost and supply of raw materials for its final product.
3. What is included in the Herfy’s franchising offering?
Intellectual Property Rights – The right to use Herfy® trade name, product and service marks, expertise
and know-how, and all literature and other material, which are protected by copyrights.

Exclusive Territory – The sole right to operate your Herfy® business withing your allocated territory.
Area Development Agreement – Area developers will give you the right to operate business within the
allocated territory for an initial period of 10 years. The renewal of the contract will depend on the
fulfillments by the franchisee of the Herfy’s conditions and interest between the two parties.
Transfer of Business Knowledge – Management will share their accumulated expertise and experience
and Franchisee’s management and team will undergo their rigorous training in Herfy HQ which is divided
in two parts (classroom & on the job training).
4. What are the advantages of Herfy franchise?
Real Estate Selection – Herfy’s team will work with the franchisee and their realtors to identify the best
market and will provide with best advice in order to secure a place for your Herfy restaurant.
Construction Support – Herfy will help the franchisee to set up their store in terms of their standard with
sketches, artistics impressions, furniture, fixture and equipment.
Operational Support – Herfy’s operation team will support you with their knowledge, hands on
experience on the restaurant work, updating with necessary manuals and their recipes, preparations and
methods.
Marketing and Promotional Activities and Support – As Herfy has been operating their business for more
than 40 years they have decades of expertise on how to market and promote their products. Being part
of their organizations, you will able to lean on their expertise for this purpose.
Purchasing Support – Frozen and Dry products will be shipped to the franchisee’s destinations. In
addition, a franchisee will be given the opportunity of using their purchasing muscle to get the best or
favorable pricing from the suppliers.
5. What do Herfy expect from their franchise partners?
Business Management – Herfy expect that the operating partners and their whole team will undergo
through their training program in their pilot training centers. The ownership will ensure that the operating
partner and designated team will participate in any all training sessions are required by Herfy.

Realistic Investment Expectation – The prospective franchisee understands the investment required and
their pro-forma statement and ROI be realistic in terms of how rapidly they will see an ROI.
Meet Commitments – Herfy expect honesty and integrity from our partners and they will enter into a
partnership with you and your company on such basis.
Respect for our and your Reputation – It took a lot of effort and years of hardworking for Herfy to have
the success they have now. Their reputation is unimpeachable and when they sign the documents with
you declaring their partnership, they expect you to take this matter seriously.
6. List the franchisee selection criteria of Herfy.
First of all, the franchisee should have good reputation and credibility the market, high personnel
motivation & strong passion for excellent customer service.
Potential Area Developer Candidate/Company –
- Successful multi-brand food groups that are experienced in western foods.
- Successful groups or companies from these sectors –
• Food service sector
• Retailing and other servicing sectors
• Real estate, property development and management business
• Hospitality business
• Food and beverage distribution business
- Strong marketing-oriented company
- Access to appropriate real estate
- Access to a minimum of US $2,000,000 liquid capital and net worth of US $4,500,000
- Access to supply chain resources.