PHILIPPINE SCHOOL OF BUSINESS ADMINISTRATION

MK16 FRANCHISING ACTIVITY #2

Name :

Student Discussion Activity

Many franchise systems tend to be retail-based. While franchises typically have a
greater success rate than new independent businesses, there are some types of
retailers that seem to be more suited to franchising than others.

In this activity, you need to determine whether a fast-food restaurant or a

convenience store would be a more appropriate vehicle for franchising?
RETAILER FACTOR POTENTIAL BENEFIT VALUE TO A VALUE TO A
Fast food Convenience
Restaurant Store Franchise
Franchise

BRAND A strong brand may create HIGH HIGH

the ability to win a greater
number of customers, SOME SOME
depending upon
how consumers choose LOW LOW
between competing stores

TRAINING Some businesses are complex HIGH HIGH

to operate. Therefore,
providing training is an SOME SOME
advantage in more complex
businesses LOW LOW

EFFICIENT Some businesses can generate HIGH HIGH

OPERATIONS a competitive advantage from
efficient (stream-lined) SOME SOME
operations – usually
depending upon the number LOW LOW
of steps in the business
process

BORROWING Some businesses are quite HIGH HIGH

 ACCESS expensive to set up and may
require the owner to borrow. SOME SOME
Typically, it is easier to obtain
a bank loan for an LOW LOW
established franchise system

EFFICIENT Buying at a good price, with HIGH HIGH

BUYING consistent quality, from
reliable suppliers is usually SOME SOME
quite
important to retailers LOW LOW

PRODUCT Some businesses require new HIGH HIGH

DEVELOPMENT products to help them grow. In
a franchise system, the SOME SOME
franchisor will often take on
the LOW LOW
responsibility for
researching and developing
new products.

OVERALL From the above information, Very suitable Very suitable

how suitable is each of these Somewhat Somewhat
types of stores to be Not suitable Not suitable
franchised?

Student Discussion Questions

1. Start by reviewing both retail formats against the criteria in the above table.

2. Based on your responses in Q1, which of the two store types would be more
suited to being franchised?

Based on the results after reviewing the two store types considering the retail
factors, the fast-food restaurant is most likely to be a more appropriate vehicle for
franchising.

3. Other than in the retailing sector, what other business types do you think
would be suitable for franchising?

Job Franchise
Job Franchise is another type of franchise business that has no obligation of hiring
employees and has flexible working hours. The company may choose to do the work
by themselves. Cleaning services, repair services and security solutions are
common examples of running a single operator franchise. The work may be
managerial or blue-collared services. It mostly requires the business to supply and
deliver products along with additional services and also needs them to be easily able
to commute when the business demands.

4. Can you add to the above criteria, in order to help firms assess whether
franchising is suitable for them?

Technology/ Online applications

Most consumers can all agree that online shopping is more convenient than purchasing
goods directly from the store, especially now that there is an on-going pandemic. With
the proper strategy and technique, companies are able to use technology and the
internet to their own advantage in promoting and advertising their brand and products.