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Md. Mustafijur
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He could pay the $10,000 franchise fee and lease most of the equipment
he need to get started. He can lease all the equipment from the
franchiser. The company would help him with his grand opening and
would help him compiled a list of potential customers.
Joe can find the right franchise for the following steps:-
Step-1:- Ask the company for a copy of their uniform franchise offering circular (UFOC) and
study about it.
Step-2:- Set about investigating the authenticity of the information provided in the
(UFOC).
Step-3:- Talk to other franchises of the company to learn about the support provided by the
company in terms of training, advertising, promotions and the profitability. The
information obtained from other franchises.
Step-4:- Be cross checked with the company and all types of information should be
sought from the company. such as the philosophy towards franchises the
company culture, what are the future expansion plans, how would they affect etc.
Answered to the Questions 2. Continue…
Step-8:- What would be fixed costs, what be the variable cost, what would
be the profit, what they be sufficient?
And then based on all the above Joe should make his decision.
Answered to the Questions 2. continue….
Joe can protect him-self from making a bad franchise investment for the follow:-
5. Training and support:- Franchisor support and training help to protect bad investment.
Training & Support:- This includes in initial training and support that should
be ongoing and extend to the business operations.
Answered to the Questions 3. continue….
Benefits could prove illusory:- If Joe choose the wrong franchisor and fail
to thoroughly evaluate the franchise agreement, training, and brand
recognition may be non-existent.
Potential for Reduced Margins:- This is will impact his profit margin. so he
should make sure that the franchise opportunity and the value of the
franchise system.
Conclusion
Our study findings suggest that potential franchisees should carefully
investigate new franchisors before investing. The average new franchise
system at the beginning will fail. Fortunately, our study provides criteria for
selecting a new franchise system that is more likely to succeed than the
average system:
• First, the franchisee should seek franchisors that are expanding rapidly. Since
system growth is important to the establishment of the new franchisors’ brand
name, a slowly growing franchise system may not be able to promote its brand
names cost-competitively.
• Second, the franchisee should not seek a franchise system that promises a lot of
field support. Such support
• Third, the franchisee should not be dismayed by the learn headquarters of a new
franchise system.
Recommendation
In our research, we have developed a model to help identify successful new
franchisors. By understanding the model, potential franchisees can find the
franchises that are likely to survive and build valuable brand names. No
matter the industry a franchise system starts in or where it’s located, these
interrelated factors determine the new system’s probability of survival:
•Rapid growth means that the new franchise system reaches minimum
efficient scale to promote the brand name competitively with established
firms.