Humber College: Franchising and Small Business Management Report

This report delves into the realm of franchising, focusing on its relevance within the Canadian business landscape. It begins by highlighting the significance of franchising in Canada, emphasizing its role in business expansion and investment. The report then provides a balanced analysis of franchising, outlining both its advantages, such as brand recognition and support, and its disadvantages, like inflexibility. It further explores the process of evaluating a franchise opportunity, including factors like product evaluation, location assessment, and financial capacity. The legal aspects of franchising are also discussed, covering disclosure documents and franchise agreements. The report concludes by summarizing the benefits of franchising and suggesting its potential for the Wild West Town theme park, providing a comprehensive overview of franchising for business owners and aspiring entrepreneurs.

Running head: MANAGEMENT OF SMALL ENTERPRISES
Management of small enterprises
Name of student
Name of the University
Author note

1MANAGEMENT OF SMALL ENTERPRISES
Table of Contents
Introduction................................................................................................................................2
Discussion..................................................................................................................................2
Significance of franchising in Canada...................................................................................2
Advantages and disadvantages of franchising.......................................................................2
Evaluation of franchising opportunity...................................................................................3
Legal issues............................................................................................................................3
Disclosure of documents....................................................................................................3
Franchise Agreement.........................................................................................................3
Reasons for taking a franchise...............................................................................................4
Merits of buying asserts versus shares of existing business..................................................4
Conclusion..................................................................................................................................4
References..................................................................................................................................5

2MANAGEMENT OF SMALL ENTERPRISES
Introduction
Franchising is a different area of business where the franchisors intended to selling
their business rights to another third party which might owned by any independent operator,
generally named as franchisees (Brookes et al., 2016). This report is intended to suggest some
business strategy to the owner of the Wild West Town theme park for selling it to any
franchisees.
Discussion
Significance of franchising in Canada
In Canada, most of the businessperson are taking the advantages of the franchising in
order to expand their business by adding more value to it. The particular process carries the
significance of expanding a particular business faster in addition to less capital investment
(Hoy & Stanworth, 2014). The ISED (innovation, science and economic development) of
Canada works coordinating with the Canadians in order to enhance the process of investment
by providing them significant opportunity to adopt the process of franchising.
Advantages and disadvantages of franchising
The process of franchising have different perspectives. Avoiding the conflict and
confusion of opening a new business and taking the advantages of bulk supplier become
advantageous in this process. Furthermore, the existing business’s brand name helps to gain
advantages in the business start-ups. On the other hand, lack of more flexibility, the ongoing
and absence of any legal support to the same might me impeding factor (Salar & Salar, 2014).

3MANAGEMENT OF SMALL ENTERPRISES
Evaluation of franchising opportunity
Prior to the decision of owing a franchise, it is mandatory for the business owner to
evaluate the opportunities associated to it. The following can be consider as the process of
evaluating the opportunities;
 Evaluating the service and product the existing business is offering to the consumers
(Welsh & Alon, 2015).
 Examining the location of the existing business, as it plays a vital part in customer
convenience.
 Determining whether the franchisor poses the capacity of accessing sufficient capital
or not.
 Evaluating the sustainability and competitive advantages including the competitors to
the business.
Legal issues
The legal issues associated to the franchise business are as follows;
Disclosure of documents
The vital concern of it is to give information about the franchisee and the franchisor. It
include information about the franchisor, staff of the company, legalisation and bankruptcy
history, purchasing and investment details and territory rights (Brookes et al., 2016).
Franchise Agreement
It is an important legal concern, which includes system of the franchise, such as products and
trademarks, duration of the franchise, payment of the franchisee to franchiser, training and
advertising methods.

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Reasons for taking a franchise
The reason for buying a franchisee include the followings;
 Lack of business uncertainty
 Ongoing support and opportunity
 Existing brand awareness
Merits of buying asserts versus shares of existing business
Buying asserts are comparatively flexible, less expensive having more potential liabilities as
compare to buying shares. Furthermore, the buying of an assert provides advantages in
purchasing and sales advantages.
Conclusion
Therefore, from the above discussion it can be concluded that, owing a franchise can be
beneficial as it provide many accelerating factor to enhance the business. The owners of the
Wild West Town theme park can consider the above advantages and gain benefits by
becoming a franchisor.

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References
Brookes, M., Altinay, L., Wang, X. L., & Yeung, R. (2016). Opportunity identification and
evaluation in franchisee business start-ups. Journal of Service Theory and
Practice, 26(6), 889-910.
Hoy, F., & Stanworth, J. (2014). Franchising: an international perspective. Routledge.
Salar, M., & Salar, O. (2014). Determining pros and cons of franchising by using swot
analysis. Procedia-Social and Behavioral Sciences, 122, 515-519.
Welsh, D. H., & Alon, I. (2015). International franchising and other forms of
entrepreneurship. Global Entrepreneurship, 2, 196-228.