Should Tensek and Pacek consider franchising over organic growth?
Question 1: Should Tensek and Pacek consider franchising over organic growth?
I think the company should consider franchising instead of organic growth. The most valid reason in my opinion being that they can achieve significant growth without having to invest a lot of personal capital. The journey of organic growth, in the long run could lead to exponential success, but from starting with one store, all capital (and profits from sale) will be tied into slow, methodic expansion. By franchising, they have the opportunity to expand the business at the expense of the franchisee’s interests and capital.
Question 2: What adjustments would they need to make for franchising in the Croatian context?
Due to the fact franchising is a relatively new concept in Croatia, the major adjustment would probably be educating the country on the concept of franchising. Hopefully formal education and training on franchising would take the skepticism out of the idea of franchising.
Question 3: How could they protect their Intellectual Property and business format know-how?
They can protect the intellectual property and business format know-how by, patenting and trademarking everything that is associated with the company. I would also hire a team of business lawyers to ensure everything associated with the company is in proper legal standing (required paperwork, legal rights and possessions, etc). Finally, I would consider some type of employee agreement that would establish company policy and disclosure agreements.
Question 4: How could they fight off local imitators?
Local imitators will generally come into the market because the original company’s success is evident, and competitors will naturally want a share of the revenue. However, I feel the disadvantage of the imitator is that they are constantly chasing the first company’s success. In order to fight of local imitators, I feel the most effective method is to establish a very aggressive marketing stance
I think the company should consider franchising instead of organic growth. The most valid reason in my opinion being that they can achieve significant growth without having to invest a lot of personal capital. The journey of organic growth, in the long run could lead to exponential success, but from starting with one store, all capital (and profits from sale) will be tied into slow, methodic expansion. By franchising, they have the opportunity to expand the business at the expense of the franchisee’s interests and capital.
Question 2: What adjustments would they need to make for franchising in the Croatian context?
Due to the fact franchising is a relatively new concept in Croatia, the major adjustment would probably be educating the country on the concept of franchising. Hopefully formal education and training on franchising would take the skepticism out of the idea of franchising.
Question 3: How could they protect their Intellectual Property and business format know-how?
They can protect the intellectual property and business format know-how by, patenting and trademarking everything that is associated with the company. I would also hire a team of business lawyers to ensure everything associated with the company is in proper legal standing (required paperwork, legal rights and possessions, etc). Finally, I would consider some type of employee agreement that would establish company policy and disclosure agreements.
Question 4: How could they fight off local imitators?
Local imitators will generally come into the market because the original company’s success is evident, and competitors will naturally want a share of the revenue. However, I feel the disadvantage of the imitator is that they are constantly chasing the first company’s success. In order to fight of local imitators, I feel the most effective method is to establish a very aggressive marketing stance