Franchise

							 The franchisor giving certain rights to the
  franchisee within a certain period of time
 A business method that involves the
  licensing of trademarks and methods of
  doing business
 Usually chain stores
Applicants have a meeting
with franchisor

  Contract

     Franchisor provides training to
     franchisee

         Select the venue of the store
         and hire staffs
   Franchisor:
    › Plan location and decoration of the
      franchisee’s shop
    › Provide training
    › Give continuous guidance and assistance to
      franchisee
   Franchisee:
    › Pay entrance fees
    › Pay certain percentage of sales revenue as
      franchisee fees
 7-Eleven
 Starbucks
 KFC
 Burger King
 Pizza Hut
 GONG CHA
 Happy Lemon
   Entrance Fee : 450,000 – 550,000
    › Include a returnable stock deposit of 200,000
 Operating period given: 5 years
 Venue: Franchisee can select from the
          existing 7-11stores, except the
          newly opened stores
 Rent: pay by franchisor
 Franchisee need to attend a
  60-days training course (for free)
   Entrance Fee :
    › Returnable stock deposit : $30,000
    › Purchase of Equipment : $120,000 ~ $130,000
    › Decoration Fee : $150,000 ~ $200,000
    › FEHD License Fee : $20,000
    › Stock Purchase : $120,000 ~ 150,000

   Operating period given: 3 years
    › From the 4th year, contract need to be renewed
      per 2 years for $40,000
   Consultant
    › Consultancy fee : $2,000 each time
    › Commissioner need to come at least 1
      time/month during the first six months
   Franchise to one company ONLY
    › Starbucks  Maxim’s
    › KFC (HK)  Birdland (Hong Kong) Limited
    › Burger King  SSPHK (Airport and The Peak)
    ›              NAS Holdings (Others)
    › Pizza Hut  Jardines Group


   This kind of franchisees can franchise to
    others
   Expand regionally, nationally and
    internationally
   No need to take care of daily operations of
    the branches
   Can concentrate on the development of
    the whole business
   Franchisee can find out new areas of
    business
   Earn the entrance fees and regular
    franchisee fees
   Block the chance of loss
 No need to spend long period of time to
  build the company’s reputation
 Burden is less than independently setting
  up a new business
 Obtains support from the head office
 Can learn the way to run a business
 Ensure there is not other competing
  franchise business around
 Franchisee can become a competitor
 Franchisee may hurt the reputation of
  the head office
 Have to follow the requirements of the
  franchisor
 Lack of self determination or scope of
  creativity
 The franchisee cannot take all the profits
 Have to pay a certain percentage of
  sales revenue as franchise fees
 Textbook
 Wikipedia (English / Simple English)
    › en.wikipedia.org / simple.wikipedia.org

   7-11
    › http://www.7-eleven.com.hk

   GONG CHA
    › http://www.gong-cha.com

   Online Forum
    › http://forum.online.hk/viewthread.php?tid=966&extra=pa
      ge%3D1&ordertype=1