1) Wahoo's would gain more profit without a monetary investment. Franchisees would use their money to fiance and operate a restaurant or more. Wahoo's would receive a franchise fee and royalties which could be used to national advertising, improving the quality of service and invent new recipes. Whoo's would be able to expand their restaurant quicker than they would be able to on their own. Allowing others a license to operate a business with the company name and the company's regulations, will allow for more restaurants to be able open at the same time or in multiply areas. 2) For a franchisee, the benefits are plentiful. Franchisees have a great chance to succeed. They will have ongoing company training and support to run your business successfully. They also have the advantage of an already know name and brand. Franchisees also have other franchisee for support and training. Franchisees also have less cost. Franchisees benefit from national and regional advertising put in place by the franchiser. They can also benefit by buying more than one franchisee and receiving discounts on fees. 3) The initial franchise fee is $30,000 for the first restaurant and $25,000 for each additional restaurant. Houston's fee would be $280,000. Since Houston generates $110,000 per month and the royalty fee is 5% of gross sales per week, annual royalty fees for all 11 restaurants would be
4) Many challenges could arise as Wahoo grows rapidly. One being with the individual franchisees who has a different approach to business. They may decided to not follow the franchise agreement, guidelines and restrictions set in place by the franchiser and not only hurt their personal business, but could also damage the reputation of the franchise. Another challenge that Wahoo may face is finding the right business types to franchise to. If the business owner can not properly run the business and sales are not to standards, they may refuse to pay royalties and advertising...
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