If a person travels across the world he or she can see many stores with the same name in different countries. For example, you can see a Subway, 7-Eleven or Dunkin Donuts not only in America but also in Europe. Franchising is the business model that allows many different owners to use one brand name. A franchiser sells entrepreneurs the rights to utilize the company’s trademark and strategy for production or offering service. In turn, a franchisee pays initial fees, and he is obligated to give a certain percent of revenue to the franchiser on regular basis. A parent company and an entrepreneur gain some benefits. A franchiser builds “chain stores” to distribute goods without investments and gets additional revenue and advertising. A franchisee obtains the well-know corporation’s name, its reputation, and well-developed strategy, and he is trained frequently. A franchisee is more likely to succeed in this type of business than open a new one.
Franchised businesses exist in many industries, but their great number is concentrated in fast food, hotel, and restaurant spheres. One of the outstanding examples of franchising is McDonald’s. Its restaurants have been opened in 127 countries, and more than 75% of McDonald’s stores are operated by franchisees.
Franchised businesses are widely extended and offer the same goods and services in every store in every part of the world. This allows people to buy products they like in different countries. If an American who likes a certain ice-cream from McDonald’s goes to Russia, he can find his favored dairy treat easily there. Thus, meals that were a part of the American culture or any other culture have become an integral part of many nations.
A mutually beneficial cooperation in the franchising business model contributes to the expansion of “chain stores” and makes them more convenient and available for people. At the same time, humans have gotten accustomed to the fact that franchised stores have wide distribution, and their favored food can be obtained by them all over the word.
1 comment:
Subway has just surpassed McDonalds as number one in the number of franchised locations. Interesting. I wonder if this has to do with the health food trend. Subway is far from healthy, but it is regarded so. McDonalds, however, has my favorite french fries! : ) Great post. I like learning of different business models. When questioned about Subway taking over McDonalds spot at the top, a CEO said McDonalds is concerned with being the best, not the biggest. I am sure they would like to be both again, though! I wonder what their strategy will be to reclaim their space at the top!
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