Boom Panes
CHAPTER I
THE PROBLEM AND ITS BACKGROUND Introduction
Franchising is often described as a powerful economic engine which has played an important role in business growth and expansion for nearly half a century. The franchise business system is a fast developing segment and one of the most adopted growth strategy particularly in the retail sector.
Franchising means that a franchisor sells the rights to use an established brand name and business model to a franchisee that is legally independent; in exchange the franchisor receives a share of the profits. By applying a complete and well tested business concept, the franchisee thereby minimizes the risks associated with opening a business.
The relationship between a franchisor and franchisee is a lot more complex than traditional buyer-supplier interactions, not only are there certain responsibilities in a franchise relationship two to retain the value of the trademark, but the relationship is also sensitive to conflicts due to power and dependence between the parties. Hence, there is a need for research that examines the relationship within this particular business format. The franchise relationship is a long-term cooperation between the parties who have entered into a binding contractual agreement with specified obligations. Both parties are dependent on each other; the franchisor is dependent on franchisee’s effectiveness, the franchisee on the other hand is dependent on the help and experience from the franchisor.
Franchisor and franchisee strive to maximize their own profit therefore; the relationship between these two parties is different from an employer employee perspective because there is less necessity for a franchisor to monitor the performance of the franchise since the franchisee makes considerable investments in his or her own outlet.
This research is aiming to identify the financial sustainability of Riverstar Food Corporation as a franchisee of Jollibee Parang Corporation to conclude if
THE PROBLEM AND ITS BACKGROUND Introduction
Franchising is often described as a powerful economic engine which has played an important role in business growth and expansion for nearly half a century. The franchise business system is a fast developing segment and one of the most adopted growth strategy particularly in the retail sector.
Franchising means that a franchisor sells the rights to use an established brand name and business model to a franchisee that is legally independent; in exchange the franchisor receives a share of the profits. By applying a complete and well tested business concept, the franchisee thereby minimizes the risks associated with opening a business.
The relationship between a franchisor and franchisee is a lot more complex than traditional buyer-supplier interactions, not only are there certain responsibilities in a franchise relationship two to retain the value of the trademark, but the relationship is also sensitive to conflicts due to power and dependence between the parties. Hence, there is a need for research that examines the relationship within this particular business format. The franchise relationship is a long-term cooperation between the parties who have entered into a binding contractual agreement with specified obligations. Both parties are dependent on each other; the franchisor is dependent on franchisee’s effectiveness, the franchisee on the other hand is dependent on the help and experience from the franchisor.
Franchisor and franchisee strive to maximize their own profit therefore; the relationship between these two parties is different from an employer employee perspective because there is less necessity for a franchisor to monitor the performance of the franchise since the franchisee makes considerable investments in his or her own outlet.
This research is aiming to identify the financial sustainability of Riverstar Food Corporation as a franchisee of Jollibee Parang Corporation to conclude if