Saturday, April 14, 2012

What Is A Franchise ? | Best Home Business Resources

What is A franchise, well it is a network of businesses that belong to a group. The business group issues licences for individual businesses to market its own products or services. Most groups grant licences to operate in specific territories. A franchised business is usually owned by an independent business owner that either reports or participates in decisions affecting the entire chain.
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For example, if I?d like to start a small donut shop. I could start from scratch, buy my own equipment, do my own marketing, arrange my own lease etc. Or I could approach an existing franchise chain, such as ?Dunkin Donuts?, and request to join them as a ?franchisee?. The chain?s head office in most cases will evaluate my request, qualify my finances, get me to commit to premises lease and sign the dotted line. After the signup process and the initial commitment, the head office will supply me with equipment and guidance as to how to get the outlet up and running. The degree of assistance from the franchisor (the operator of the chain) does vary between chains.
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The popularity of franchises has risen significantly in the last few decades in Australia. A whopping $130 billion a year is estimated to turnover in fra nchised businesses. There are many options on offer in a range of industries.
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McDonalds is possibly the most successful network. With over 30,000 locations, $25 billion in annual turnover, 1.5 million employees, and 70 million daily patrons in 130 countries ? they are 2nd to no other chain. 33% of all Australian takeaway meals are served by McDonald?s. Starting in 1940 from 1 shop, it grew exponentially after changing their business model be based on mass production.
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Around the world, franchises chains enjoy a varying degree of success and exposure. Per capita, New Zealand has the highest amount of franchised chains, with over 400 chains operating and only 3 million people. China has seen a massive rise in recent years in the franchise industry with over 2000 KFC outlets opening, at double the rate of McDonalds. India, in comparison, is lagging in this field. With widespread poverty and heavy regulations imposed on foreign investors ? the 1+ billion strong nation is far behind most developed nations when measuring on a per capita basis.
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In Australia, franchising is regulated by the ?Franchising Code of Conduct?, under the Trade Practices Act of 1974. This code requires franchise network operators to produce a PDS which must be given to the new owner at least 14 days before entering an agreement.
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Franchised shops & outlets enjoy a lower rate of failure in comparison to other businesses.

Related posts:

  1. Understanding The Franchise Business
  2. Buying Into A Franchise Opportunity Increases Your Chances Of Success
  3. Franchise Opportunities Against Starting Your Own Business
  4. A Look At The Senior Care Franchise
  5. About The Selective Franchise Products And Services

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