FRANCHISING

A SYSTEM FOR SELECTIVELY

DISTRIBUTING GOODS OR
SERVICES THROUGH OUTLETS
OWNED BY RETAILER OR
DEALER.
 FRANCHISE
 IT IS PATENT OR TRADE MARK LICENSE,
ENTITLING THE HOLDER TO MARKET A
PARTICULAR PRODUCT OR SERVICE UNDER A
BRAND NAME OR TRADEMARK ACCORDING TO
PREDETERMINED TERMS AND CONDITIONS.

 BUYER- FRANCHISEE.

 COMPANY THAT SELLS RIGHTS- FRANCHISER.

DIFFERENCE BETWEEN
FRANCHISING/DISTRIBUTORSHIP

 PRINCIPAL NOT ALLOWED TO EXERT

REAL CONTROL OVER THE DISTRIBUTOR
OR THE AGENT.

 FRANCHISER EXERCISE A HIGHER

DEGREE OF CONTROL OVER THE
FRANCHISEE.
 CONTD………
 FRANCHISER HAS RIGHT TO SAY IN
MATTERS LIKE

 BRANDING.

 METHODOLOGY OF PROMOTION.

 MERGERS.
CLASSIFICATION OF FRANCHISING

 PRODUCT FRANCHISING.

 MANUFACTURING FRANCHISING.

 BUSINESS FORMAT FRANCHISING.

 PRODUCT FRANCHISING
 ONE OF THE EARLIEST.

 DEALERS GIVEN RIGHT TO DISTRIBUTE

GOODS FOR A MANUFACTURER.

 DEALER PAYS A FEE TO SELL THE

TRADEMARKED GOODS.

 PIONEERS WERE :SINGER CORPORATION

 PETROLEUM AND AUTOMOBILES.
MANUFACTURING FRANCHISING.

 GIVES RIGHT TO PRODUCE AND

DISTRIBUTE THE PRODUCT IN
PARTICULAR AREA.

 SOFT DRINK INDUSTRY.

 BUSINESS FORMAT FRANCHISING

 FRANCHISER OFFERS
 KNOW HOW OF THE PRODUCT.
 TRAINING.
 ADVERTISING.
 STRATEGIC PLANNING.
 PRODUCTION PATTERNS.
 MANUALS.
 STANDARDS
 SUBSTANTIAL CAPITAL INVESTMENT.
 ADVANTAGES FOR FRANCHISEE.

 READY TO RUN BUSINESS.

 LESS CHANCE OF FAILURE.
 REDUCES THE PERIOD OF AGONY TO
EARN GOOD WILL.
 HIGHER PURCHASING POWER AS A
PART OF LARGER ORGANISATION.
 NO NEED TO SET UP SEPARATE R&D
DEPT.
 PROTECTED IN A PARTICULAR AREA.
CONTD……
 OBTAINING FUNDS IS EASIER.

 BACKING OF KNOWN TRADE NAME

IS HELPFUL FOR NEGOTIATING
SITES.
 DISADVANTAGES
 NO SCOPE FOR CREATIVITY.

 REMAINS CONFINED TO A SINGLE

PRODUCT LINE OR PARTICULAR
GEOGRAPHIC LOCATION.

 NO RIGHT FOR SALE WITHOUT THE

KNOWLEDGE OF FRANCHISER.

 GOOD WILL REMAINS PROPERTY OF

FRANCHISER.
SMALL SCALE INDUSTRIES
 INDUSTRIAL UNDERTAKING.

 INVESTMENT IN FIXED ASSETS i.e

plant and machinery.

 HELD ON OWNERSHIP/LEASE/HIRE

 DOES NOT EXCEED Rs 1 crore.

EXAMPLES OF SSI.
 BRICK.

 MOULDS.

 RUBBER TIERS etc..

 ANCILLARY UNIT

 A UNIT WHICH PRODUCES

PARTS/COMPONENTS/SUB- ASSEMBLES
etc…
DIFFERENCE OF SSI & ANCILLARY UNIT

 SSI  ANC – UNIT

 FINANCIAL & MRKTING  NEED NOT HAVE

KNOWLEDGE MRKTG
REQUIRED. KNOWLEDGE.

 PAYMENT NOT  PAYMENTS ARE

SUBJECT TO DELAYED.
IRREGULARITY.
CONTD…
 DO NOT SUFFER  VULNERABLE TO
VARIATION IN VARIATION IN
DEMAND. DEMAND.

 ABLE TO SWITCH  PRODUCTS

OVER TO OTHER HIGHLY
ITEMS. SPECIALISED.

 CAN MAKE QUICK  TIED TO BIG CO’s.

ADJUSTMENTS.
 BUSINESS ETHICS
 ETHICS REFFERED FROM GREEK WORD
“ETHOS”

 REFERS TO CHARACTER.

 DEALS WITH MORALITY IN BUSINESS

ENVIRONMENT.
 DO’s
 SINCERITY AND ACCURACY IN
ADVERTISING ,LABELING AND PACKAGING.

 PAYOFFS TO
CUSTOMERS,SUPPLIERS,ADMINISTRATORS.

 FAIR WAGES & FAIR TREATMENT.

 PAY TAXES AND DISCHARGES PROMPTLY.

DONT’s
 SLAMMING OF PRODUCTS.

 DO NOT DESTROY COMPETITION.

 DO NOT TARNISH IMAGE OF

COMPETITORS.
SOCIAL RESPONSIBILITY OF BUSINESS

 RESPONSIBILITY TO SELF.

 RESPONSIBILITY TO CUSTOMER.

 RESPONSIBILITY TO WORKERS.

 RESPONSIBILITY TO SHARE HOLDERS.

CONTD……
 RESPONSIBILITY TO GOVERNMENT.

 RESPONSIBILITY TO SUPPLIERS.

 RESPONSIBILITY TO COMMUNITY.
THANK YOU.

ALL THE BEST………………..