Franchising and the
Entrepreneur
Where else can we find a job creator, an
economic stimulator, and a personal
wealth creator that gives the
opportunity to realize dreams and
financial security for families beyond
wildest expectations? …Dan DeBolt
Franchising
A system of distribution
in which semi-
independent business
owners pay fees and
royalties to a parent
company in return for
the right to become
identified with its
trademark, sell its
products and services,
and use its business
format and system
Types of Franchising
Trade name
Product
distribution
Business
format
Benefits of Buying a Franchise
Management training and support
Brand name appeal
Standardized quality
National advertising
Financial assistance
Proven products and business formats
Centralized buying power
Site selection and territorial protection
Greater chance of success
Drawbacks of Buying a
Franchise
Franchise fees and ongoing royalties
Strict adherence to standardized
operations
Restrictions on purchasing
Limited product line
Contract terms and renewal
Market saturation
Less freedom
10 Myths of Franchising
Safest way to go
Less money to open
Bigger franchise organization,
more successful
Use 80% of business format
All are the same
No need for hands-on
management
Anyone can be successful
Cheapest way to get into
business
All problems will be solved
Run things the way I want to
Franchising and the Law
Uniform Franchise
Offering Circular
(UFOC)
Federal Trade
Commission-Trade
Regulation Rule
(23 major topics)
Right Way to Buy a Franchise
Evaluate yourself
Research your market
Consider your options
Get a copy of their UFOC
Talk to existing franchisees
Ask some tough questions
Make your choice
Trends Shaping Franchising
Multiple-unit franchising-a method
of franchising in which a
franchisee opens more than one
unit in a broad territory within a
specified time period
11%
Trends
International
Opportunities
China-1,900
franchises,
82,000 outlets
McDonalds-119
countries,
10,000 outlets
Trends
Smaller, nontraditional locations-
intercept marketing: the principle
of putting a franchisee’s products
or services directly in the paths of
potential customers, wherever they
may be
ex. Dunkin Donuts
Trends
Conversion Franchising-a
franchising trend in which
owners of independent
businesses become franchisees
to gain the advantage of name
recognition
ex. Century 21
Trends
Master Franchising-a franchise
that gives a franchisee the right
to create a semi-independent
organization in a particular
territory to recruit, sell, and
support other franchisees
Trends
Piggybacking-a
method of
franchising in which
two or more
franchises team up to
sell complementary
products or services
under one roof
ex. Taco Bell, KFC, Pizza
Hut, A&W-Yum! Brands
Trends
Serving Dual-Career Couples
And Aging Baby Boomers