Assessing A Franchise Opportunity Flashcards
What is in it for the franchise owner?
Enables a firm to expand its sales quickly
Franchise owners do not only sell a franchise but receives a share of all future sales
Franchise owner, can concentrate on developing new products or services
What do you need to be effective?
- Identify a menu and an image that customers want
- Work out how to run operations effectively
- find the right suppliers
- market your business effectively
What are some of the key benefits of buying a franchise?
- Buying an image, methods of doing something
- benefit from national advertising
- chance of products and methods failing low
How do you identify the best location for the franchise? (4)
- City or town
- part of city or town
- Immediate features (what do you want to be near to)
- what are the right factors, shop size or cost
How do you identify the best location for the franchise in more detail? (4)
- they possible customers and their location
- having to decide on the town and weather or not the franchise is on the outskirts or town center
- immediate features; easily accessed, open space, where other businesses are located
- habits or needs of the customers, practical requirements, cost of lease and fitting and decorating the premises
What can be the problem with the location of the shop?
In a terrific location, busy but the annual rent makes the fixed costs to high
To cheap location, not generating enough revenue to pay other costs
Why might an entrepreneur not want to buy a franchise?
Royalty payments
Not all franchises are a good one
What should the person buying the franchise do to see if it is a good investment?
Check the financial records, talk to existing franchise owners,
What does entrepreneur mean?
Someone who takes the risk of starting up a new enterprise
What does royalties mean?
Paying a percentage of the sales revenue generated by a business or product
What is franchising?
Selling the rights to use your business idea and methods at a specific location
