Assignment 2 Choice B
Simone DeVane
Christopher McChesney
MGT 320
13 November 2014
Choice B
What is franchising?
Franchising is a business model in where a parent company (the franchisor) sells the rights to business owners (franchisees) to identify with that company’s trademark. The franchisee pays fees and royalties to the franchisor so that they may sell the parent company’s products and services. They also may purchase the right to utilize the business formula already established by the franchisor. This is often termed a “success package” (Scarborough 2012 pg. 76).
Franchises are not independent businesses so the franchisees are known as semi-independent. They do not have the power to change overall business strategies …show more content…
Tradename franchising refers to the process of buying the right to represent a particular company name on one’s business establishment. An example of tradename franchising would be True Value Hardware. My parents owned a True Value hardware store when I was a child. This type of franchising is perhaps the least constrictive of the three types as a business operating under tradename franchising is purchasing a company’s name, but does not have to exclusively disburse specific products/services.
Product distribution franchising is where the franchisee buys a license to distribute certain products produced by the parent company. When you see a car dealership that states they are a “Certified Toyota Dealership”, this means that business owner has purchased a product distribution franchise from Toyota and are licensed to distribute/repair Toyota vehicles. This tends to increase the vehicle’s price (and repairs performed at the dealership), however the title of “Certified” gives an overall image of credibility and prestige to the dealership that consumers tend to trust. Well, car dealers are not known for garnering trust in the consumer so a product distribution license certainly helps a …show more content…
Pure franchising is the whole enchilada in terms of franchise types. One can purchase tradename or product distribution franchising without buying pure franchising, but pure franchising includes both types with many more elements. It is the complete business arrangement and is clearly defined and comprehensive. It includes everything a successful business model should, from operations methods to quality control standards process. When one purchases a pure franchising opportunity, they are buying “…the right to use all the elements of a fully integrated business operation” (Scarborough pg.
Simone DeVane
Christopher McChesney
MGT 320
13 November 2014
Choice B
What is franchising?
Franchising is a business model in where a parent company (the franchisor) sells the rights to business owners (franchisees) to identify with that company’s trademark. The franchisee pays fees and royalties to the franchisor so that they may sell the parent company’s products and services. They also may purchase the right to utilize the business formula already established by the franchisor. This is often termed a “success package” (Scarborough 2012 pg. 76).
Franchises are not independent businesses so the franchisees are known as semi-independent. They do not have the power to change overall business strategies …show more content…
Tradename franchising refers to the process of buying the right to represent a particular company name on one’s business establishment. An example of tradename franchising would be True Value Hardware. My parents owned a True Value hardware store when I was a child. This type of franchising is perhaps the least constrictive of the three types as a business operating under tradename franchising is purchasing a company’s name, but does not have to exclusively disburse specific products/services.
Product distribution franchising is where the franchisee buys a license to distribute certain products produced by the parent company. When you see a car dealership that states they are a “Certified Toyota Dealership”, this means that business owner has purchased a product distribution franchise from Toyota and are licensed to distribute/repair Toyota vehicles. This tends to increase the vehicle’s price (and repairs performed at the dealership), however the title of “Certified” gives an overall image of credibility and prestige to the dealership that consumers tend to trust. Well, car dealers are not known for garnering trust in the consumer so a product distribution license certainly helps a …show more content…
Pure franchising is the whole enchilada in terms of franchise types. One can purchase tradename or product distribution franchising without buying pure franchising, but pure franchising includes both types with many more elements. It is the complete business arrangement and is clearly defined and comprehensive. It includes everything a successful business model should, from operations methods to quality control standards process. When one purchases a pure franchising opportunity, they are buying “…the right to use all the elements of a fully integrated business operation” (Scarborough pg.