RETAIL FRANCHISE

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					RETAIL FRANCHISE
RETAIL BASICALLY MEANS
  ‘SELLING IN SMALLS’
WHAT DOES FRANCHISE MEAN?
IT IS A RIGHT OR PRIVILEGE GRANTED
TO A PERSON OR CORPORATION WITH
       THE AUTHORITY TO SELL A
     COMPANY’S PRODUCT/S IN A
          PARTICULAR AREA.
  IT IS A BUSINESS PARTNERSHIP
INVOLVING A FRANCHISOR AND A
           FRANCHISEE.
 THE FRANCHISOR PROVIDES THE
KNOW-HOW, TRAINING, SYSYTEMS
       AND THE BRAND.
THE FRANCHISEE INVESTS HIS MONEY
 FOR MANAGING HIS BUSINESS UNIT
     FRANCHISING ENABLES THE
  FRANCHISEE TO LOWER HIS RISKS
    SINCE HE OPERATES WITH THE
EXISTING AND PROVEN BRAND OF THE
      FRANCHISOR AND IS AT AN
ADVANTAGE TO EXPAND HIS BUSINESS
  WITH THE HELP HE GETS BY USING
THE RESOURCES OF HIS FRANCHISOR.
    FRANCHISING IS A BUSINESS
    PARTNERSHIP BETWEEN THE
 FRANCHISOR AND THE FRANCHISEE
HAVING SPECIFIC RELATIONSHIPS AND
    RESPONSIBILITIES WITH THE
   COMMON AIM OF INCREASING
 MARKET SHARE OF THE BRAND AND
SERVICING MORE CUSTOMERS THAN
          COMPETITION.
PRESENTLY THERE ARE TWO MAJOR
 TYPES OF FRANCHISING IN RETAIL
   1. PRODUCT/TRADE NAME
         FRANCHISING

2. BUSINESS FORMAT FRANCHISING
PRODUCT/TRADE NAME FRANCHISING
 IS WHERE THE FRANCHISEE OBTAINS
 THE TRADE NAME, TRADEMARK, OR
       THE PRODUCT FROM THE
   FRANCHISOR. E.G. ARROW, WILLS
 LIFESTYLE, TOMMY HILFIGER, DISNEY
                ETC.
  BUSINESS FORMAT FRANCHISING
ALLOWS THE FRANCHISEE TO USE THE
   ITEMS MENTIONED ABOVE AND
      MORE IMPORTANTLY THE
  PRESCRIBED BUSINESS
           FORMAT
   THE FRANCHISEES DOING THE
  PRESCRIBED BUSINESS FORMAT
    OBTAIN THE IDENTITY OF THE
FRANCHISOR IN THE TOTAL ASPECT OF
THEIR RETAIL OPERATIONS. EXAMPLES
      ARE MCDONALDS, BATA,
         KFC, ARCHIES ETC.
 BENEFITS OF FRANCHISING:
    (FOR FRANCHISOR)

 LOW CAPITAL EXPENDITURE
PERSONAL COMMITMENT AND
       MOTIVATION
REDUCED DAILY INVOLVEMENT
DRAWBACKS OF FRANCHISING:
    (FOR FRANCHISOR)

   LOSS OF OWNERSHIP
    INTERDEPENDENCE
       LOW PROFITS
ADVANTAGES OF FRANCHISING:
     (FOR FRANCHISEE)

   PROVEN TRACK RECORD
  INITIAL HELP AND ADVICE
     ESTABLISHED NAME
CONTINUAL SUPPORT, TRAINING
       AND GUIDANCE.
DISADVANTAGES OF FRANCHISING:
       (FOR FRANCHISEE)

EFFORT AND HARD WORK REQUIRED
    TO ESTABLISH FRANCHISE.
 REGULAR PAYMENTS TO BE MADE.
     MUTUAL DEPENDENCE.
       FULL INVOLVEMENT
 FRANCHISOR’S PROCEDURES FOR
   ORGANIZING A FRANCHISE:

   COMMISSION A FRANCHISE
          CONSULTANT.
 PREPARE A FRANCHISE PACKAGE:
OPERATIONS & TRAINING MANUALS.
    SYSTEMS & PROCEDURES.
        BUSINESS FORMS.
           CONTACTS.
FRANCHISE AGREEMENTS COVERING:

       LENGTH &TERRITORY.
   RIGHTS & RESPONSIBILITIES.
      TERMS & CONDITIONS.
   FRANCHISE RECRUITMENTS.
   WORLDWIDE POPULARITY OF
FRANCHISING HAS BECOME POPULAR
 BECAUSE AN EFFECTIVE METHOD
 FOR RAPID MARKET PENETRATION
AND DISTRIBUTION OF THE PRODUCT
  HAS TAKEN PLACE WITHOUT THE
   USUAL CAPITAL EXPENDITURE
   ASSOCIAITED WITH DOMESTIC
           EXPANSION.
WHERE DO YOU LOOK FOR A
FRANCHISE OPPORTUNITY?
FRANCHISING ASSOCIATION OF INDIA
          NEWSPAPER
          MAGAZINES
           WEBSITES
    SEMINARS & EXHIBITIONS
WHICH FRANCHISE OPPORTUNITY TO
            RUN?

THE FRANCHISEE SHOULD ASSESS HIS
 INTERESTS, STRENGTH AND SKILL IN
 WHICH HE WILL FEEL ENTHUSIASTIC
   AND WILLING TO DEVELOP THE
   PRODUCT/TRADE NAME OF THE
FRANCHISOR AND CAN SELECT FROM:
 COMPUTER/IT EDUCATION
   PRIMARY EDUCATION
RESTAURANTS & FAST FOOD
    BAKERY PRODUCTS
     GREETING CARDS
        RETAILING
MEDICAL CLINICS/LABS/CHEMISTS
BEAUTY PARLORS/HEALTH CLINICS
            TRAVEL
           FLORIST
           COURIER
          LAUNDRY
 HOW DOES A FRANCHISEE
 EVALUATE A FRANCHISE?

THERE ARE FIVE STEPS TO BE
       FOLLOWED :
 1. THE FRANCHISEE EXAMINES
      THE OPPORTUNITIES

  ANALYSES THE LONGEVITY
      OF THE PRODUCT
  STUDIES THE POPULATION
    STABILITY OF HIS AREA
NOTES DOWN THE COMPETITION
     CHECKS THE PRICE/S
      ASSESSES THE RISK
2. EXAMINE THE FRANCHISE AND THE
           FRANCHISOR

  A. IDENTIFY THE INFORMATION OF
       THE FRANCHISOR AND HIS
   ASSOCIATES REGARDING THEIR
        BUSINESS EXPERIENCE.
    B. CHECK THE CREDENTIALS OF
PERSONNEL RESPONSIBLE FOR GIVING
 FRANCHISE SERVICES AND TRAINING
      C. FIND OUT IF ANY LEGAL
PROCEEDINGS ARE PENDING AGAINST
  THE FRANCHISOR OR ANY OF HIS
             PERSONNEL.
  D. CHECK IF THERE HAS BEEN ANY
  PREVIOUS BANKRUPTCY HISTORY.
 E. FIND OUT ABOUT ALL THE COSTS
    AND INVESTMENTS REQUIRED
    F. FIND OUT IF THERE ARE ANY
RESTRICTIONS ON QUALITY, QUANTITY,
  CUSTOMERS, SERVICES, PURCHASE
             AND SUPPLY.
    G. VERIFY THE DESCRIPTION OF
GOODS AND SERVICES PERMITTED TO
               BE SOLD.
   H. ASCERTAIN THE LIMITS OF THE
           TERRITORY GIVEN
 I. OBTAIN DETAILS OF THE TERMS &
   CONDITIONS UNDER WHICH THE
 FRANCHISE MAY BE RE-PURCHASED,
      REFUSED RENEWAL BY THE
  FRANCHISOR, TRANSFERRED TO A
THIRD PARTY BY THE FRANCHISEE AND
TERMINATED OR MODIFIED BY EITHER
               PARTY.
 J. ASCERTAIN THE DETAILS OF THE
TRAINING PROGRAM THAT WILL BE
PROVIDED TO THE FRANCHISEE AND
 HIS STAFF. ALSO WHO WILL BEAR
            THE COSTS.
K. FIND OUT WHETHER ANY CELEBRITY
OR PUBLIC FIGURE WILL BE INVOLVED
          IN THE FRANCHISE.
      L. HELP IN SITE SELECTION.
       M. PROVIDE STATISTICAL
 INFORMATION TO THE FRANCHISOR.
N. PREPARE A FINANCIAL STATEMENT.
O. ASCERTAIN THE PARTICIPATION
 REQUIRED BY THE FRANCHISEE.
  P. OBTAIN STATEMENT OF ROI
  COMMITTED TO FRANCHISEE.
Q. GET A LIST OF THE NAMES AND
    ADDRESSES OF THE OTHER
          FRANCHISEES.
R. POINTS TO BE CONSIDERED
  ABOUT PERSONAL NEEDS.

     FUNDS REQUIRED
      BUSINESS SKILLS
 INTEREST IN THE PRODUCT
   3. ANALYSE AND EVALUATE
  FRANCHISORS INFORMATION.

A. EXPERIENCE OF MANAGEMENT
        AND DIRECTORS.
B. NO. OF YEARS THE FRANCHISOR
     HAS BEEN IN BUSINESS.
 C. NUMBER OF FRANCHISEES IN
           OPERATION.
      D. REPUTATION AMONGST
            FRANCHISEES.
E. FRANCHISOR’S FINANCIAL STABILITY
     F. TYPE OF TRAINING GIVEN.
   G. WHETHER ANY ASSISTANCE IN
             FINANCING.
       H. TYPE OF MANAGEMENT
    ASSISTANCE TO BE PROVIDED.
I. ASSISTANCE IN LOCATING THE SITE.
    J. PROJECTION OF PROFIT AND
           BREAK EVEN POINT.
 4. INVESTIGATE THE FRANCHISOR.

A. SEEK PROFESSIONAL HELP FROM A
CHARTERED ACCOUNTANT TO VERIFY
THE CORRECTNESS OF THE FINANCIAL
      INFORMATION PROVIDED.
B. REVIEW THE PROFIT POTENTIAL OF
           THE BUSINESS.
    C. ENSURE THAT FINANCIAL
 STATEMENTS PROVIDED MEET THE
    ACCOUNTING STANDARDS.
D. CHECK THE REASONABLENESS OF
THE INVESTMENTS UNDER VARIOUS
    HEADS LIKE FRANCHISE FEE,
       INFRASTRUCTURE ETC.
E. ASCERTAIN THE FAIR MARKET VALUE
 OF ITEMS GIVEN BY THE FRANCHISOR
         TO THE FRANCHISEE.
   F. APPOINT A LAWYER WHO WILL
               REVIEW:
       THE PERIOD OF CONTRACT
    RESTRICTIONS IMPOSED ON THE
             FRANCHISEE
PROVISIONS OF EXCLUSIVE TERRITORY
      CONDITIONS AND COSTS OF
       TERMINATING FRANCHISE
  G. CONTACT A BANKER WHO WILL
JUDGE THE FRANCHISOR’S COMPANY.
H. CHECK THE FINANCIAL STATEMENT
       OF THE FIRST FIVE YEARS’
 OPERATIONS TO DETERMINE ROI OF
           THE FRANCHISEE.
   I. HELP THE FRANCHISEE IN RISK
       ANALYSIS AND FINANCIAL
 STRUCTURING OF THE INVESTMENT.
5. MAKE A DECISION AFTER HAVING
   CONSIDERED THE FOLLOWING:
   DO YOU KNOW THE FEATURES
    OF AN ETHICAL FRANCHISE?

   DO YOU KNOW THE FRANCHISE
 INDUSTRY WELL AND DOES IT OFFER
YOU AN ATTRACTIVE, VIABLE FUTURE?

     DO YOU HAVE SUFFICIENT
      FINANCES AVAILABLE?
ARE YOUR PERSONAL AND FINANCIAL
     GOALS COMPATIBLE WITH
          FRANCHISING?

  DO THE POSITIVES EXCEED THE
      NEGATIVES FOR YOU?

   ARE YOU INDEPENDENT, SELF
 DISCIPLINED, AMBITIOUS, SOCIAL
       AND TRUSTWORTHY?
   ARE YOU FAMILIAR WITH THE
 TERRITORY, IN GOOD HEALTH AND
SUPPORTED BY YOUR LOVED ONES?

IS THE FORMAT COMPLETELY TESTED
    AND TRIED, DISTINGUISHED,
       COMPREHENSIVE AND
        STRAIGHTFORWARD?
   ARE YOU AWARE OF THE
   CHARACTERISTICS OF A
   REPUTABLE FRANCHISE?

   DOES YOUR FRANCHISE
  POSSESS THESE FEATURES?

 DOES IT REMAIN AN APPEALING
LONG TERM PROSPECT FOR YOU?
      IS THE FRANCHISOR FULLY
   KNOWLEDGEABLE,REPUTABLE,
    FINANCIALLY SECURE AND IN
   POSSESSION OF APPROPRIATE
     FRANCHISING OBJECTIVES?

   DOES THE FRANCHISE PACKAGE
    PROVIDSE VALUE FOR YOU?

DOES IT ALSO PROVIDE A STISFACTORY
 RETURN OF INVESTMENT FOR YOU?
  IS THE FRANCHISE CONTRACT
     FAIR AND REASONABLE?

ARE THE RENEWAL, ASSIGNMENT &
     TERMINATION CLAUSES
         TRANSPARENT?

 DO YOU TAKE RELEVANT ADVICE
BEFORE SIGNING THE AGREEMENT?
 FINALLY, ARE YOU AWARE OF THE
 WAYS IN WHICH THE FRANCHISOR
FRANCHISEE PARTNERSHIP USUALLY
DEVELOPS, SYMPATHISING WITH THE
    FRANCHISOR’S POSTION?
 THE FRANCHISOR SHOULD
CONSIDER THE FOLLOWING :
    ARE YOU AWARE OF THE
    CHARACTERISITICS OF A
REPUTABLE FRANCHISEE AND DOES
   THE FRANCHISEE POSSESS
       THESE FEATURES?

 DO YOU RECOGNIZE THE BENEFITS
 AND DRAWBACKS OF FRANCHISING
ALONG WITH THEIR RESPECTIVE SIDE
   EFFECTS AND WHETHER THE
   PROS OUTWEIGH THE CONS?
    ARE YOU AND YOUR TEAM
EXPERIENCED, FINANCIALLY SOUND,
   ETHICAL AND COMMITTED?

IS THE MARKET LARGE & GROWING?

   ARE THE FINANCIAL COSTS
 MANAGEABLE & WORTHWHILE?
IS YOUR PRODUCT & SERVICE RANGE
   VARIED, WELL ESTABLISHED AND
      SELLING STEADILY AT THE
           PRICE DECIDED?

   CAN YOUR QUANTITATIVE AND
  QUALITATIVE OBJECTIVES BE BEST
ACHIEVED VIA THIS TRADING SYSTEM?
    IS YOUR TRADING NAME
         APPROPRIATE?

DO YOU HAVE A FIRST CLASS IMAGE
   AND ACHIEVED GOODWILL?

ARE YOUR SYSTEMS & PROCEDURES
   RELEVANT AND UP TO DATE?

DO YOU PROVIDE THE CORRECT MIX
OF ONGOING SERVICES PROMPTLY?
IS YOUR OPERATING MANUAL CLEAR,
     DETAILED AND UP TO DATE?

IS YOUR FRONT END FEE FAIR AND THE
 CONTINUING MANAGEMENT SERVICE
 FEE REASONABLE FOR BOTH PARTIES?

DOES YOUR FRANCHISE APPLICATION
 FORMS ENABLE YOU TO PROPERLY
       ASSESS APPLICANTS?
 IS YOUR FRANCHISE PROSPECTUS
   INFORMING AND ATTRACTING
 SUITABLE WOULD BE FRANCHISES
WHILE DISSUADING UNSUITABLE ONES
         FROM APPLYING?

   DO YOU KNOW THE TYPES OF
   PERSONALITY, BACKGROUND,
FINANCES, AND GOALS THAT OUGHT
       TO BE POSSESSED BY
     THE IDEAL FRANCHISEE?
DO YOU LIASE WITH THE APPROPRIATE
   EXPERIENCED LAWYER BEFORE
 SEEKING A FRANCHISE CONTRACT?

       ARE YOU CHOOSING
     THE RIGHT FRANCHISEES?

IS THE FRANCHISE AGREEMENT CLEAR,
     COMPLETE AND BALANCED?
ARE THE TERMS & CONDITIONS OF
  RENEWAL, ASSIGNMENT AND
  TERMINATION REASONABLE?

DO YOU FULLY UNDERSTAND THE
   FRANCHISOR FRANCHISEE
RELATIONSHIP, RECOGNIZING THE
  FRANCHISEE’S VIEWPOINTS?
ARE YOU PROMOTING THE FRANCHISE
   PACKAGE THROUGH THE MOST
      APPROPRIATE SOURCES?

DO YOU COMMUNICATE WITH EACH
OTHER AT ALL TIMES, EXCHANGING
    IDEAS, SUGGESTIONS AND
   CONSTRUCTIVE CRITICISMS?
FINALLY, DO YOU REGULARLY REVIEW
 YOUR FRANCHISING APPROACH TO
   MAXIMISE YOUR CHANCES OF A
       SUCCESSFUL FUTURE?
COST ELEMENTS OF A FRANCHISEE:


          PREMISES
          FURNITURE
           FITTINGS
           SIGNAGES
    ADVERTISING FUND/LEVY
        TRAINING FEES
         STOCK
      INSURANCE
  STAFF RECRUITMENT
FRANCHISOR FEES EITHER
   ROYALTY OR SERVICE
REGULAR FIXED PAYMENT1
 COST ELEMENTS OF FRANCHISOR

   PREPARATION OF MANUALS
           TRAINING
 ADVERTISING, PUBLIC RELATIONS,
      LAUNCH PROMOTION
PROFESSIONAL FEES & LEGAL COSTS
 SUPPLY TRANSPORTATION COSTS
    TOOLS AND EQUIPMENTS
ONCE THE DECISION OF GIVING AND
TAKING A FRANCHISE IS DECIDED, A
FRANCHISE AGREEMENT HAS TO BE
            MADE.
   THE MAIN FUNCTIONS OF THIS
        AGREEMENT ARE :

1. TO SET DOWN IN WRITING WHAT IS
AGREED BETWEEN THE TWO PARTIES
 IN ORDER TO AVOID DISPUTES AT A
            LATER DATE.
  2. TO PROTECT THE FRANCHISOR’S
 KNOW-HOW, TRADEMARK, SECRECY
      OF METHODS AND SO ON.
THE FRANCHISE AGREEMENT HAS
        TWO PHASES :
           PHASE – 1
      PURCHASE AGREEMENT

   SIGNED ONCE THE PROSPECTIVE
FRANCHISEE SHOWS HIS INTEREST IN
          THE FRANCHISE.
   ONCE PURCHASE AGREEMENT IS
 SIGNED , THE FRANCHISOR STARTS
LOOKING FOR POTENTIAL LOCATIONS
(IF APPLICABLE) AND ITS FEASIBILITY.
PREPARE CASH FLOW PROJECTIONS.
BOOK THE POTENTIAL FRANCHISEE
    INTO TRAINING PROGRAM.
      CHECK HIS REFERENCES.
 THE POTENTIAL FRANCHISEE PAYS
SOME INITIAL MONEY TO COVER UP
   THE COST FRANCHISOR HAS
    INCURRED IN SETTING THE
       FRANCHIISE ROLLING.
            PHASE – 2
     FRANCHISE AGREEMENT
THIS ALSO INVOLVES TWO PHASES :

1ST. PHASE – INVOLVES FRANCHISORS
OBLIGATIONS TOWARDS FRANCHISEE
IN TERMS OF PROVIDING TRAINING,
 HELP FRANCHISEE RAISE FINANCES,
 HELP FRANCHISEE FIND PREMISES,
 HELP NEGOTIATE WITH LANDLORD
        AND OBTAIN LEASE,
      PROVIDE SHOP FITTING,
  HELP WITH STAFF RECRUITMENT,
AND ANY OTHER ASSISTANCE AGREED
   BETWEEN THE TWO PARTIES.
    2ND. PHASE – ONCE TRADING
 COMMENCES, AGREEMENT COVERS
ALL THE CONTRACTUAL OBLIGATIONS
     IN DETAIL OF BOTH PARTIES
   REGARDING FEES, ADVERTISING,
  TERRITORY AND TERMINATION OF
            CONTRACT.
   DESCRIPTION OF CONTRACT

  IT LAYS DOWN THE TERMS AND
CONDITIONS OF THE FRANCHISE AND
THE DETAILED OBLIGATIONS OF BOTH
             PARTIES.
1. IT GIVES A BRIEF DESCRIPTION OF
THE NATURE OF FRANCHISE.
2. ITS TRADE MARKS.
3. KNOW HOW.
4. COPYRIGHT & WHO OWNS THEM.
5. LENGTH OF CONTRACT.
6. TERMS AT TIME OF RENEWAL.
7. TERRITORIAL RIGHTS.
8. FEES STRUCTURE AND TIMING OF
WHEN IT IS REQUIRED TO BE PAID.
9. SPECIFICATION OF THE
CIRCUMSTANCES UNDER WHICH
REFUND OF DEPOSIT PAID BY
FRANCHISEE DURING PURCHASE
AGREEMENT.
10. MANAGEMENT FEE – FIXED OR
BASED ON PERCENTAGE TERMS.
11. STANDARD ACCOUNTANCY
PROCEDURE.
12. ADVERTISING FUND TO BE
CONTRIBUTED BY FRANCHISEE AND
AMOUNT HE NEEDS TO GIVE FOR
NATIONAL COVERAGE AND OWN
TERRITORIAL ADVERTISING.
13. OBLIGATIONS – SPECIFYING THE
DO’S AND DON’T’S.
OBLIGATIONS OF FRANCHISOR :

        TRAINING
       EQUIPMENT
          DÉCOR
        MANUALS
     ADVICE AND HELP
        RECORDS
 OBLIGATIONS OF FRANCHISEE :

          CONDUCT
        COMPLIANCE
          PREMISES
      STAFF STANDARDS
         GOODWILL
SAFEGUARD OF TRADE MARK AND
        BRAND NAME
           ACCESS
SALE/RESALE/ASSIGNMENT CLAUSES :

            WHAT IF
 FRANCHISEE WANTS TO SELL THE
           FRANCHISE
   FRANCHISEE IS ABOUT TO DIE
 HE WANTS TO TRANSFER A LEGAL
PROPERTY FOR THE FRANCHISE TO A
          THIRD PARTY
FOR ALL THE ABOVE, CONDITIONS ARE
 LAID DOWN IN THE AGREEMENT TO
 MAKE SURE THAT FRANCHISE IS SOLD
       TO THE RIGHT PERSON.
         IN SUCH CASES :

THE AGREEMENT SHOULD SET DOWN
THE BASIS ON WHICH THE BUSINESS IS
           TO BE VALUED.
   FRANCHISOR HAS THE RIGHT TO
  REFUSE SHOULD THE FRANCHISEE
   WANT TO SELL THE FRANCHISE.
   THE NEW FRANCHISEE NEEDS TO
  UNDERGO TRAINING AT HIS OWN
               COST.
    IF FRANCHISOR DISPOSES THE
    FRANCHISE ON BEHALF OF THE
FRANCHISEE, HE WILL PROBABLY LEVY
A CHARGE FOR ARRANGING THE SALE.
ONCE THE FRANCHISEE GIVES UP THE
   FRANCHISE, FOR A STIPULATED
PERIOD (18-24MONTHS) HE CANNOT
      JOIN ANY COMPETITOR.
THE FRANCHISEE CANNOT DISCLOSE
 ANY CONFIDENTIAL INFORMATION
  ABOUT THE FRANCHISE SUCH AS
    CONTENT5 OF OPERATIONAL
     MANUAL, PRICING POLICY,
    ACCOUNTING SYSTEMS ETC.
ON THE DEATH OF SOLE FRANCHISEE,
  HIS REPRESENTATIVE WILL HAVE A
SPECIFIED TIME MAYBE 3 MONTHS TO
 INFORM FRANCHISOR WHETHER HE
 WANTS TO RESALE TO THE HEIRS OF
 THE DECEASED FRANCHISEE OR SELL
THE FRANCHISE AT MARKET VALUE TO
           A THIRD PARTY.
IN CASE OF JOINT FRANCHISEE, IF ONE
    IS NO MORE, THEN SURVIVING
PARTNER/S AUTOMATICALLY GET THE
       RIGHTS OF THE DECEASED
            FRANCHISEE.
 TERMINATION BY THE FRANCHISOR

  HE SHALL HAVE THE RIGHT IN HIS
ABSOLUTE DISCRETION TO TERMINATE
          THE CONTRACT.
NEEDS TO GIVE 30 DAYS TERMINATION
   WRITTEN NOTICE WITH STATED
            REASONS.
     CAUSE CAN BE BREACH OF
    AGREEMENT OR ANY OTHER.
 IF THE TERMINATION LETTER STATES
 THAT THE CAUSE CAN BE REMEDIED
THEN FRANCHISEE GETS 30 DAYS TIME
     TO RECTIFY THE PROBLEM TO
FRANCHISORS SATISFACTION AND THE
  FRANCHISOR WILL WITHDRAW THE
         NOTICE IN WRITING.
   TERMINATION BY FRANCHISEE

    AFTER A STIPULATED PERIOD
MENTIONED IN THE AGREEMENT THE
 FRANCHISEE IS FREE TO TERMINATE
          THE FRANCHISE.
HE NEEDS TO GIVE A WRITTEN NOTICE
 AS PER PERIOD MENTIONED IN THE
 AGREEMENT AND SURRENDER THE
           LEASE (IF ANY).
    PAY DEBTS , IF ANY, TO THE
  FRANCHISOR AND WHOSOEVER
 CONNECTED WITH FRANCHISING.
 CEASE TO REPRESENT HIMSELF AS
          FRANCHISEE.
 RETURN STATIONARY AND OTHER
MATERIALS INCLUDING MANUAL TO
          FRANCHISOR.
     SURRENDER ANY LEASEHOLD
  INTEREST AND ANY FURNITURE OR
             FITTINGS.
FRANCHISOR WILL PAY MARKET VALUE
         OF THESE ASSESTS.
TYPES OF FRANCHISE AGREEMENTS
DIRECT FRANCHISING FORMAT

 SUBSIDIARY FRANCHISING

REGIONAL/AREA OR MULTIPLE
      FRANCHISING

    UNIT FRANCHISING

   MASTER FRANCHISING
  DIRECT FRANCHISING FORMAT IS A
 SIMPLE ARRANGEMENT WHERE THE
FRANCHISOR GRANTS A FRANCHISE TO
  THE FRANCHISEE BY EXECUTING A
     CONTRACT. UNDER THIS THE
 FRANCHISOR HAS DIRECT CONTROL
     OVER THE FRANCHISEE AND
   MONITORS AND CONTROLS THE
           OPERATIONS.
     SUBSIDIARY FRANCHISING :
WHEREVER LAWS AND REGULATIONS
ALLOW FOREIGN ORGANIZATIONS TO
SET UP THEIR SUBSIDIARIES IN INDIA,
 FRANCHISING IS DONE THROUGH A
   SUBSIDIARY. THE FRANCHISOR
CONTROLS THE SUBSIDIARY DIRECTLY.
  THE MAJOR ADVANTAGE OF THIS IS
THAT THE FRANCHISOR IS PRESENT IN
THIS COUNTRY AS A CORPORATE BODY
 AND THE CONTRACT IS A DOMESTIC
 CONTRACT SUBJECT TO LOCAL LAWS.
HERE THE SUBSIDIARY OFFICE GRANTS
 FRANCHISE RIGHTS FOR RETAILING
 AND DEALERSHIPS. THE SUBSIDIARY
OFFICE ENTERS INTO AN AGREEMENT
WITH THE FRANCHISEES. EG. FOREIGN
     AUTOMOBILE COMPANIES.
    REGIONAL/AREA OR MULTIPLE
FRANCHISING : HERE THE FRANCHISOR
   OFFERS FRANCHISE RIGHTS TO A
   FRANCHISEE FOR AN AREA OR A
    REGION. THIS IS ALSO CALLED
  MULTIPLE FRANCHISING BECAUSE
   MORE THAN ONE FRANCHISEE IS
 GIVEN THE RIGHTS FOR SELLING THE
 SAME BRAND. THE BEST EXAMPLE IS
           MCDONALDS.
      UNIT FRANCHISING : THE
  FRANCHISOR OFFERS RIGHTS TO A
FRANCHISEE TO RUN JUST ONE STORE
THROUGH AN EXCLUSIVE AGREEMENT.
 THIS INVOLVES MANY FRANCHISEES
   AND CONTROLLING THEM AND
   MONITERING COMPLIANCE OF
    SPECIFICATIONS MAY BECOME
             DIFFICULT.
   THE PLUS POINT IS THAT EACH
FRANCHISEE PAYS FULL ATTENTION TO
 THE STORE AND ITS PERFORMANCE.
   EXAMPLES ARE OF AYURVEDIC
COMPANY HIMALAYA AND A NUMBER
   OF ‘WORLD OF TITAN’ STORES.
 MASTER FRANCHISING : HERE THE
FRANCHISOR GRANTS THE RIGHTS TO
AN ENTIRE COUNTRY OR TERRITORY.
THE FRANCHISEE CAN OPEN OUTLETS
    ITSELF AND/OR GRANT SUB-
     FRANCHISEES TO OTHERS.
IN SUCH SITUATIONS TWO TYPES OF
   AGREEMENTS ARE GENERALLY
  INVOLVED : ONE BETWEEN THE
     FRANCHISOR AND MASTER
    FRANCHISEE AND THE OTHER
BETWEEN MASTER FRANCHISEE AND
        SUB -FRANCHISEES.
  THE ADVANTAGE OF THIS TYPE OF
 FRANCHISING IS THE RAPID GROWTH
OF SALES COUPLED WITH THE MARKET
   KNOWLEDGE OF THE LOCAL SUB-
     FRANCHISEE. EXAMPLES ARE
        FOOTWEAR BRANDS

				
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