Topics: Franchising, Franchise, Marketing Pages: 5 (1693 words) Published: December 3, 2011
Concept of franchise
There are thousands of franchised businesses, covering nearly every conceivable industry, from well-known national brands to smaller, local opportunities. The challenge is to decide on one that both interests the investors and is a good investment. The term franchise basically illustrates the concept of buying an international company and using in a different country/state. In other words it means one is buying the right to use a specific trademark or business concept. The business run is essentially the same as all other business being run under the same name. In order to do this, it is require buying things like products, tools, advertising assistance, and training from the franchisor (the company that owns the rights to the business). Benefits of being a franchise

One can attain a number of benefits on purchase of a franchise: * Reduced risk - Franchises traditionally have a much lower failure rate than other start-up businesses. * Receive a complete package - The total package can include trademarks, easy access to an established product; a proven marketing method; equipment; inventory; etc. * Strength in numbers - When you're becomes a franchisee, one have the buying power of the entire network, which can help to get product and compete with larger national chains. * Business processes - Many franchisors provide their franchisees with various proven systems including financial and accounting systems; ongoing training and support; research and development; sales and marketing assistance; planning and forecasting; inventory management; etc. They'll show the techniques that have made the business successful and help to utilize them in developing your own business. * Financial and site selection assistance - Some companies will help to finance the initial franchise. They also may help with site selection, making sure that the business is located in an area where it can thrive. * Advertising and promotion - Not only it will benefit from any national or regional ad and promotional campaigns from the franchisor, but they may also help internationally from providing camera-ready copy for your own advertising efforts to developing in-store point-of-sale materials designed to drive customers through the business. It would cost a great deal to develop these materials on own. Disadvantages of franchise

* Franchising is certainly not for everyone due to a couple of reasons; one of the major is lack of control. In franchise business buying and operating a proven concept can make one feel like he is more a manger than a boss. This may be difficult for some people, especially those that are more entrepreneurial. This type of person may find it hard to conform to someone else's system. On the other hand it can take a good deal of cash to open and operate a franchise. Upfront costs can be significant, and you may find that ongoing royalty fees will have a major impact on your cash flow. Just as a franchisor's reputation can benefit an individual business, the franchisor's problems are also your problems. So if the parent company comes upon hard times, the individual franchise may also suffer because of how closely you're tied in. Moreover the franchise agreement is a binding contract, and can be quite restrictive. One is locked in to certain business practices, fees, and even the look of the business. Franchise law in Bangladesh

Before entering into any agreement one should consider having an attorney, accountant or other advisor review the disclosure documents and proposed contracts. This can help to save capital and keep one from making a bad investment. The disclosure document is provided by the franchisor. It can serve as a window into the company's operations. It is important to review it completely (preferably with the assistance of an attorney, accountant or business advisor) to know all the important information about the franchisor. Such document may provide the information...
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