 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 4 th 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 ›  GONG CHA ›  Online Forum › ge%3D1&ordertype=1