Chapter 7: Franchising and Entrepreneurship

Types of Franchising Business format franchising: Single Unit Multiple Unit Area Franchise Master Franchise

The Potential Benefits of Franchising National economic benefits Franchisor benefits Franchisee benefits

National Economic Benefits Creates employment Contributes to tax revenue and GDP Encourages capital investment and stimulates economic growth Encourages the transfer of knowledge and innovation between countries Contributes to local tourism development or regeneration by stimulating entrepreneurship and innovation

Franchisor Benefits Access to financial resources of franchisees to support network growth Access to human capital to support network growth Access to local market knowledge of franchisees Greater brand awareness Greater control of network as franchisees have vested interest

Franchisee Benefits Access to a recognised brand name Access to the knowledge required to operate their franchised unit Ability to open own business quickly Access to a ready made customer base Access to ongoing operational and marketing support

Franchising and Entrepreneurship Franchisors as entrepreneurs –Develops business concept after identifying opportunity Franchisees as entrepreneurs –Conflicting opinions –Antithesis of entrepreneur vs. motivated, risk- taking innovators Franchising as an entrepreneurial partnership –Entrepreneurial orientation