Franchising

In the todays era, franchising is the single form of business that is flourishing at an astoundingly amazing rate

. More people tend to establish franchises and give it away to people for management. Franchises deal with famous brand names. Bring McDonalds in your mind. Most of the people tend to buy fast food from McDonalds. In actual, McDonalds was a fast food restaurant in US. When more people became dependant on it, and there were heavy sales it decided to expand. But the necessary amount for expansion was very high. McDonalds owners had an idea. They decided to sell the brand name to someone, who will maintain this name and in turn pay money for running this brand name. It is so, that McDonalds began franchising, and today is has more than 31000 food outlets round the world. In this article, we will look upon the advantages and disadvantages of franchising to both, the franchisor and the franchisee.

The advantages of franchising to the franchisor are that franchisee has to buy license from the franchisor to run the franchise. To buy this license, the franchisee pays a heavy amount to the franchisor, and besides this, pays a monthly charge for keeping that name. Moreover, a franchised business can grow much faster than if the owner would be responsible to finance all the outlets. Also, the process would be cumbersome. But the franchising is a process far better and simpler. Once the franchisor hands over a franchise to the franchisee, the franchise become the responsibility of the franchisee. This means that although the franchisor have to have monthly or bi-month inspections in the franchises, he will not have to keep day to day records of what is happening in the franchises. Lastly, all the products are sent by the franchisor, so he does not have to be worried about the quality of products in franchises.

The advantages of franchising to the franchisee are that there are low chances that this sort of business will fail because it has the backing of a far better and famous name. In such cases, there are naturally greater sales of the business. All the advertisements costs are looked after by the franchisor, so this cost is minimized. Also, the franchisor sends all the raw material, so although the franchisee has to pay for the products; he does not have to face the difficulties of obtaining the fresh materials. The loans and finance can easily be obtained from different sources because of a well-known name. Lastly, the technical, domestic and marketing staff is trained by the franchisor, so this cost is also minimized.

However, there are some disadvantages too in running these sorts of businesses. To the franchisor, if even one franchise is run poorly, this could affect the reputation of the whole business. The franchisor has to share profit with the franchisee, and so does franchisee have to do with franchisor. Also, the franchisee is less free to make decisions on his own. However, the advantages are far better and exciting to outshine the demerits.

Company: Toronto pcs

Address:222 Spadina Avenue, Unit # 116 A

Toronto, ON - M5T3B3

Zip code: M5T3B3

Contact person: micdaved

Phone: 647-693-5036

Email: fed.pats@gmail.com

For more information: http://www.torontopcs.com/

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