Chapter 2 Franchising a convenience store
CHAPTER 2
Review of Related Literature and Studies
Local Literature
According to Samie Lim, from the article of Business Today (Feb. 18, 2008) Franchising is considered a powerful tool for economic development. It creates thousands of enterprises as well as millions of jobs. It also helps fuel the growth of entrepreneurship. Samie Lim, chairman emeritus of the Philippine of the franchise Association and also a chairman of francorp Philippines, shares that here are three major reasons why franchising works.
Franchising he says, uses three of the most limited resources to expand one’s business. These are other people’s money, time, and other people’s organizations for its operation. The franchisee would be the one who would Shell out the money to open another outlet of the franchisor. He would pay all the expenses for its operation. By other people’s time he means that the franchisee would be managing the business while other people’s network or connections would make it easier for the franchisee to run the business. “He knows the local government authorities, he knows the customers. Knowing the people in the community creates lots of advantages,”
Lim simply describes that buying a franchise is acquiring a trusted brand with a consistent quality. It provides assurance to customers that they would be getting the same value whenever they purchase that brand. Franchising also thrives amid challenging times. Studies show that franchising grows even faster during times of recession as it also remains robust despite the odds. Franchising also has a 90-percent success rate compared to traditional retail (or your own business) which has only 25-percent success rate after 10 years of operation. So for non- franchises businesses, 75-percent are not expected to succeed after a decade of operation.
From the article of Philippine daily Inquirer (June 25, 2010) Magapayo states that, “the safest way for first time entrepreneur is to go franchising” . Say’s Voltaire Magpayo
Review of Related Literature and Studies
Local Literature
According to Samie Lim, from the article of Business Today (Feb. 18, 2008) Franchising is considered a powerful tool for economic development. It creates thousands of enterprises as well as millions of jobs. It also helps fuel the growth of entrepreneurship. Samie Lim, chairman emeritus of the Philippine of the franchise Association and also a chairman of francorp Philippines, shares that here are three major reasons why franchising works.
Franchising he says, uses three of the most limited resources to expand one’s business. These are other people’s money, time, and other people’s organizations for its operation. The franchisee would be the one who would Shell out the money to open another outlet of the franchisor. He would pay all the expenses for its operation. By other people’s time he means that the franchisee would be managing the business while other people’s network or connections would make it easier for the franchisee to run the business. “He knows the local government authorities, he knows the customers. Knowing the people in the community creates lots of advantages,”
Lim simply describes that buying a franchise is acquiring a trusted brand with a consistent quality. It provides assurance to customers that they would be getting the same value whenever they purchase that brand. Franchising also thrives amid challenging times. Studies show that franchising grows even faster during times of recession as it also remains robust despite the odds. Franchising also has a 90-percent success rate compared to traditional retail (or your own business) which has only 25-percent success rate after 10 years of operation. So for non- franchises businesses, 75-percent are not expected to succeed after a decade of operation.
From the article of Philippine daily Inquirer (June 25, 2010) Magapayo states that, “the safest way for first time entrepreneur is to go franchising” . Say’s Voltaire Magpayo