, MNE2604 (FRANCHISING) | ASSIGNMENT 1 | SEMESTER 1 2023| SOLUTIONS
Due date: 5 April
QUESTION:
Upon acquiring skills and competencies in franchising, you are required to demonstrate your
ability to practically establish a franchise.
Suppose you have a sustainable and successful business and you decide to introduce
franchising option so that you can further grow the business. As a Director, you have to orient
your managers to manage the franchising processes in your business.
Based on actual research, compile a presentation on how you would go about establishing a
franchising system in your business. Your presentation must consist of the practical aspects of
franchising processes in the following areas:
Present the relevance of introducing franchising in the business.
Franchising is a business model that allows the franchisor to expand their business by granting
the franchisee the right to use their brand, products, and services, along with operational and
marketing support, in exchange for a fee. Franchising has become increasingly popular as a
means of expanding a business while reducing financial risk. In this presentation, we will
explore the relevance of introducing franchising in our sustainable and successful business and
the practical aspects of establishing a franchising system.
Relevance of Introducing Franchising in the Business:
1. Growth and Expansion: Franchising provides an opportunity to expand our business by
leveraging the investment of franchisees to open new locations. This will allow us to
grow our brand and increase market share.
2. Reduced Financial Risk: Franchisees are responsible for the majority of the upfront
investment required to open a new location. This reduces the financial risk to the
franchisor.
3. Increased Brand Awareness: The more locations we have, the more exposure our brand
will receive. This will increase our brand recognition and awareness, making it easier to
attract customers and franchisees.
4. Increased Revenue: Franchisees pay an initial fee and ongoing royalties for the right to
use our brand, products, and services. This provides a new source of revenue for the
franchisor.
5. Operational Efficiency: Franchisees are responsible for the day-to-day operations of their
locations, which reduces the burden on the franchisor. This allows us to focus on
developing new products, services, and marketing strategies.
Practical Aspects of Establishing a Franchising System:
1. Develop a Franchise Agreement: A franchise agreement is a legal document that
outlines the terms and conditions of the franchise relationship. It should include the rights
and obligations of both the franchisor and franchisee, including the initial fee, ongoing
royalties, and support provided by the franchisor.
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