Franchising- marketing pov

Franchising- marketing pov

1. a contract/agreement between the franchise and the franchisee

   • Franchise- supplier/ "parent company"
   • Franchisee
     • agrees to distribute the product or service in line with certain predetermined t and c's set out by franchisor
     • Distributor/ individually-owned business

2. 1) Franchisor sells a business package- which is succesful to franchisee

   • franchisee sells product/ service to consumers in a particular area
     • helps increase market awareness of original product

3. 2) Agreement- Franchise Agreement

   • payments
     • 1) Original purchasing price of the franchise
     • 2) Royalties (5-10% of profits)
       • To franchiser
     • 3) Monthly advertising fee
       • Franchiser uses on behalf of all franchisees

4. 3) Franchiser must allocate a lot of time to train the franchisee

   • Initial training
     • train on systems and procedures
   • Must be continuous
     • form of support
   • problems experienced by franchisee have a direct impact on the franchiser and other franchisees

5. 4) Franchiser must have a well-defined marketing strategy

   • strategy- focus on target market
     • but must remind the consumer about the brand positioning and advantage of the product
       • to create and maintain competitive advantage
   • important in a market with a number of substitute products and messages has to stand out e.g Nandos

6. POV of franchiser

   • Advantages
     • 1) Can expand original business concept without spending large amounts of capital
       • also they gain capital
   • Disadvantages
     • 1) Continuous training and support of franchisees may be difficult and demanding
     • 2) Does not have direct control over franchisees
       • yet success depends on the franchisees

7. POV of franchisee

   • Advantages
   • Disadvantages