Why Do Entrepreneurs Use Franchising As A Financial Tool? Essay

1065 Words Jul 25th, 2016 null Page
The franchise business model is one of the most popular methods of entry into the business world because of the opportunity it presents the potential franchisees. “The franchise business model is based around a type of license the franchisee acquires, which allows them to have access to the franchisors proprietary knowledge, processes and trademarks in order he party to sell a product or provide a service under the business 's name” (Franchise Definition, 2006, para.1). As a result, there has been an influx of entrepreneurs that have decided that using the franchise business model is the best method to secure resources to their business concept. “Why do entrepreneurs use franchising as a financial tool? An agency explanation” is an academic article written by Manuel Gonzalez-Diaz and Vanesa Solis-Rodriguez, in which the authors explore the business model as a financial capital source. Therefore, the intent of the research is to determine if entrepreneurs see more benefit from obtaining financing through franchising, or is the other models of financing are more beneficial. The intent of the research conducted weighted heavily throughout the creation of the academic paper because the intent of the research is the basis for crafting the paper and developing the research methods that will produce a fair and balanced paper. The authors of the article wanted to test the theory of venture capitalism and how the different methods affect the success of the entrepreneur.…

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