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2nd year - 1st sem > FRANCHISING 8-10 > Flashcards

FRANCHISING 8-10 Flashcards

(67 cards)

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1
Q

_________ involves a franchisee owning and operating more than one franchise unit, either simultaneously or through phased development.

A

Multi-unit franchising

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2
Q

what are Benefits of Owning Multiple Units of Multi-unit franchising

A
  1. Increased Revenue Potential
  2. Economies of Scale
  3. Greater Market Penetration
  4. Franchisor Incentives
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3
Q

More units can result in greater collective sales and profits.

A

Increased Revenue Potential –

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4
Q

Franchisors often offer discounts or favorable terms to multi-unit operators.

A

Franchisor Incentives –

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5
Q

Shared resources across locations (e.g., marketing, HR) reduce per-unit cost.

A

Economies of Scale –

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6
Q

Expanding within a region increases brand visibility and customer loyalty.

A

Greater Market Penetration –

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7
Q

what are the Challenges of Owning Multiple Units of Multi-unit franchising

A
  1. Operational Complexity –
  2. Human Resources Strain –
  3. Financial Risk –
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8
Q

Managing different teams, locations, and schedules becomes more demanding.

A

Operational Complexity –

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9
Q

Recruiting, training, and retaining skilled staff is more difficult at scale.

A

Human Resources Strain –

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10
Q

More units mean higher capital requirements and exposure.

A

Financial Risk –

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11
Q

what are Expanding Operational Capacity of Multi-unit franchising

A
  1. Use of Management Systems:
  2. Delegation and Staffing:
  3. Standard Operating Procedures (SOPs):
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12
Q

Implement systems like ERP or POS software for centralized tracking.

A

Use of Management Systems:

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13
Q

Hiring unit managers or area supervisors to decentralize management.

A

Delegation and Staffing:

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14
Q

Ensure consistency across locations.

A

Standard Operating Procedures (SOPs):

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15
Q

what are the Financial Considerations of Multi-unit franchising

A
  1. Initial Investment:
  2. Access to Capital:
  3. Cash Flow Management:
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16
Q

Costs scale up significantly—franchise fees, build-out costs, equipment.

A

Initial Investment:

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17
Q

Multi-unit operators may seek SBA loans, private investors, or franchisor financing.

A

Access to Capital:

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18
Q

Need to manage fluctuating revenue across units

A

Cash Flow Management:

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19
Q

Franchise resale occurs when an existing franchisee ______ their franchise business, either for _____ or _____ purposes.

A
  1. sells
  2. exit
  3. investment
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20
Q

The reason

A

Common Reasons:
Retirement or lifestyle change
Pursuing other opportunities
Poor performance or burnout

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21
Q

Franchisor’s Role for Selling or Transferring a Franchise:

A

Typically reserves the right to approve buyers
May assist in the transfer process

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22
Q

What are the Factors affecting Valuation of a Franchise Business

A
  1. Financial Performance –
  2. Brand Strength –
  3. Lease and Location Quality –
    1. CONTRACT LEASE
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23
Q

EBITDA, cash flow, historical sales.

A

Financial Performance –

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24
Q

Reputation and recognition.

A

Brand Strength –

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25
Strategic location boosts value.
Lease and Location Quality –
26
Length of remaining franchise agreement.
Contract Terms –
27
what are the Valuation Methods:
1. Income-based: 2. Market-based: 3. Asset-based:
28
Discounted cash flow (DCF) or capitalization of earnings.
Income-based:
29
Compare similar franchise resales. .
Market-based:
30
Focus on tangible and intangible assets
Asset-based:
31
tips in Finding a Buyer and Negotiating Terms
1. Marketing the Sale: 2. Due Diligence: 3. Legal and Financial Advice:
32
Use brokers, franchise portals, or franchisor’s internal network.
Marketing the Sale:
33
Evaluate buyer's financial capacity, experience, and alignment with brand.
Due Diligence:
34
Involve professionals to draft and review the agreement.
Legal and Financial Advice:
35
_______ refers to the expansion of a franchise brand into foreign markets, either through master franchising, area development, or joint ventures.
International franchising
36
Methods in Expanding Internationally
1. Master Franchising: 2. Joint Ventures: 3. Area Development Agreements:
37
A foreign entity runs and sells franchises in a region.
Master Franchising:
38
The franchisee commits to opening several units.
Area Development Agreements:
39
Partner with local firms for shared control.
Joint Ventures:
40
What are the Cultural and Market Considerations
1. Cultural Sensitivity: 2. Legal and Regulatory Compliance: 3. Consumer Preferences:
41
1. Menu adaptations (e.g., McDonald's offers McAloo Tikki in India). 2. Local customs and holidays affecting business hours and promotions.
Cultural Sensitivity:
42
IP protection, foreign investment rules, and labor laws differ widely.
Legal and Regulatory Compliance:
43
Local tastes and purchasing habits must be researched thoroughly.
Consumer Preferences:
44
What are the Adapting Franchise Model
1. Flexible Business Model: 2. Localization of Supply Chains:
45
Modify branding, product offerings, or operations to suit the local market.
Flexible Business Model:
46
Use local vendors where possible to reduce costs.
Localization of Supply Chains:
47
Provide tailored support materials in the local language and context.
Training and Support:
48
WHAT ARE THE CHECKLIST ATTRACTING THE RIGHT FRANCHISEES
1. Cultural Fit, 2. Financial Stability 3. Operational Skills
49
________ involves application reviews, interviews, financial checks, and psychological profiling.
Screening
50
Who said The goal is to assess if the franchisee has the commitment, resources, and capacity to succeed within the system. Structured interviews and simulation exercises can help gauge the candidate’s problem-solving abilities and customer orientation
(Barthélemy, 2008).
51
________ is critical to standardize operations across locations.
Training
52
_____ must be practical, interactive, and tailored to real-world challenges.
Training
53
Continuous _____helps franchisees adapt to changes, resolve issues quickly, and stay motivated.
coaching
54
Franchise relationship management can be streamlined through:
1. CRM platforms for franchisee communications. 2. LMS (Learning Management Systems) for training updates. 3. Operations dashboards for real-time performance tracking (Dant, 2008).
55
what are the Evolving Trends in Franchising
1. Technological Advancements in Franchising 2. The Rise of Online and Home-Based Franchises 3. Sustainability and Eco-Friendly Franchise Models
56
what are the Challenges in the Franchise Industry
1. Franchisee Turnover and Retention 2. Legal and Regulatory Changes 3. Market Saturation and Competition
57
High turnover caused by:
1. Lack of profitability 2. Poor franchisor-franchisee communication 3. Mismatched expectations
58
Innovation beyond tech: Reimagining the entire customer journey Franchise examples:
1. Starbucks: personalized app experience (Ghosh, 2022) 2. Blaze Pizza: customer-designed pizzas
59
wHAT ARE Franchise Innovation and Adaptation
1. Adapting to Changing Consumer Behavior 2. Product, Service, and Experience Innovation 3. Responding to Industry Disruptions
60
Use of AI, automation, and data analytics to improve operations. Enhances Customer personalization, Inventory tracking, and Speed and consistency in service
Technological Advancements in Franchising
61
What are the Benefits of Technological Advancements in Franchising
Improved efficiency and accuracy Enhanced customer satisfaction
62
What are the Challenges of Technological Advancements in Franchising
Expensive implementation Franchisee resistance and training needs
63
The Rise of Online and Home-Based Franchises
1. Ensuring brand consistency 2. Franchisee support and engagement
64
challenges of Sustainability and Eco-Friendly
1. Higher upfront costs 2. Supply chain adjustments
65
what are the Focus on Sustainability and Eco-Friendly Franchise Models
1. Recyclable packaging 2. Plant-based products 3. Energy efficiency
66
Franchisee Turnover and Retention Impact:
1. Brand inconsistency 2. Increased training and recruitment costs
67
Solutions for Franchisee Turnover and Retention
1. Strong on boarding programs 2. Ongoing mentorship and training

2nd year - 1st sem (12 decks)

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