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A Quick Assessment Of Franchise Business Consulting

By Lela Perkins

Franchises are special business organizations that are set up under a very established brand name. These organizations are run as spin-offs from the main organization. The parent controls the running of all the franchises. The franchisees have to pay a special charge in form of royalties to the owners. The franchise business consulting enables the businesses to analyze different conditions before buying an organization.

The use of a well-established name enables organizations to gain entry into new markets quickly. The setup costs are reduced greatly. The risks associated with failure at this stage are also reduced. The franchisee pays royalties to the parent organization in form of profit repartition or royalties. The amounts to be paid are agreed on by the two parties in the contract. The stronger brands charge more.

The franchisee runs all the chains under the name of parent. The risks associated with setting up the business are gotten rid of. The operational costs are born by the subsidiary business. Any further costs that had not been seen at the inception are still borne by the subsidiary. The risks of failures are attached to the subsidiary too.

Operating a local operation means clearly understanding all the local conditions. The international operators often use the local agencies in order to penetrate the local markets. This is manly done through arranging the franchising business with such local organizations. The international companies partner with the smaller local organizations. The operations are done in the name of the multinationals. The profits are then split between the two organizations according to the commercial contract.

Businesses exist in different forms. The franchises also exist in different sizes. Larger franchises include the hotel, transportation companies and insurance firms. These require a very large capital in order to set the foundation. The middle-sized franchises include the fast food chains, insurance agencies and gas stations. These require a relatively smaller amount of capital in order to start the commercial operations.

The period of operation is agreed upon by the two entities. For some, the period is fixed. Once the period has lapsed, the two organizations renegotiate the terms of commercial activities. Some other agreements may take offer a longer period of operation. This may break down the renewal and licensing into even shorter periods. Some of the businesses are not allowed to venture out of a specified geographical location.

Each of the two parties has some obligations. The obligations are specified within the contract clauses. The parent protects the trademark and the brand name by ensuring that the quality of services is maintained. The company concepts and expansion decisions still remains with the patent organization. The parent has to run all the operations under the name of parent company.

There are various frameworks that guide the franchise business consulting. Before any decision is made, all the regulations have to come into play. If one of the franchises is listed, then all the stock market regulations ought to be taken into consideration. Sometimes all the commercial activities are documented in the form of accounting documents. This could also include a list of all commercials franchises.

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Article Citation
MLA Style Citation:
Perkins, Lela "A Quick Assessment Of Franchise Business Consulting." A Quick Assessment Of Franchise Business Consulting. 13 Apr. 2014. 18 Jul 2014 <>.

APA Style Citation:
Perkins, L (2014, April 13). A Quick Assessment Of Franchise Business Consulting. Retrieved July 18, 2014, from

Chicago Style Citation:
Perkins, Lela "A Quick Assessment Of Franchise Business Consulting"

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