Chapter 2 – Foundations of Franchising Think of a small business you visited rec

Question

Chapter 2 – Foundations of Franchising

Think of a small business you visited recently, restaurant, tavern, retail, etc. and then reflect on Chapter 2 of the text.

Would this location fit the following parameters set forth in the chapter? Explain why or why not.

Could the business benefit from franchising? Are their economies of scale available?

Does the business meet any of the foundations of franchising listed on page 16 of the text?

Page 21 – would the business be interesting to the “New Sophisticated Franchisee”?

Explanation / Answer

Recently, I visited a coaching institute which is providing coaching for admission in Engineering and Medical institutes.I observed that the institute showing good result consistently for 8 years and has created a good name in north India. Hunderds of the students tried to get admission into the institute but becuse of infratsructural constraints and lack of appropriate faculty the couldn't get into it.The institute also offers weekly test and study material which is equally famous among students.

Yes, the location fits most of the parameter discussed in the chapter like It has great potential of rapid market penetration at relativeliy low cost,Effective reach to targeted customers through cooperative advertising,No need of internal personnel but any motivated individual can look at it in a profitable manner,Initial training to the franchisee staff can fulfill the purpose.

Yes, the business will be benefitted from the franchisee becuse if the institute can replicate only weekly test model which is highly demanded in student community then institute doesn't require to set complete infrastructure but only limited one so that student can give test and receive study material.It save lots capital and operational costs. We can also analyze it from the economy of scale point of view because institute can prepare the study material and test material in bulk which can be transfered to different centers thus saving a lot of cost. Most of the financials are controlled centrally except monthly operational cost.

Yes, the business will be interesting to the "New Sophiscated Franchisee" because the nature of business that has been expanded under franchise model i.e opening new test centers at different places which doesn't require much of technical comptency.Any motivated and educated person from any walk of life can get the franchise which include training,monthly audit,assistance from center anf many other assistance to make the whole model a successful and independent.

Author's Note: Request you to mention or attach the preview of referred book.

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