Franchising Strategies and Types we are not selling the product pinapagamit lamang natin ito To influence the
we are not selling the product pinapagamit lamang natin ito To influence the business o Para mapataas ang
Product Distribution Channel - Kapag sinabi nating product distribution ibenebenta ni franchisor kay
franchisee ang trademark and logo pero maaaring hindi lahat bilhin ni franchisee kay franchisor.
In short it is not a complete method at masasabi natin na it is less expensive, mas mababa ang ibinabayad
natin compare to business format franchise, especially kung maliit lang ung business
Business Format Franchise – Kapag sinabi naman nating business format franchise hindi lang lang nito
ginagamit ang kay franchisor’s product, service and trademark but also the Complete method to conduct the
business such us marketing plan and operations manual. Example nito ay yung mga fast food restaurant.
Single unit Franchise – has the right to operate 1 business unit. Sa simula, if nakita ni franchisor na
maganda ang operation may possibility na magpurchase ito ng additional single unit Kapag itong si
original franchise unit begins to prosper. In other words, there is an assessment first.
Multi – unit franchise – kapag sinabi naman nating multi-unit franchise ito ay isang agreement na kung
saan si franchisee ay may rights to open and operate more units. BUT this is risky. Pwede itong isang
bagsakan. Magkakaiba kasi tayo ng market. (what does it mean?) Hindi kasi pare-pareho ng target market
or maging sa sales. SO that, Kailangan mong maging wise in terms of this franchise.
2 Ways a Multi-Unit can be achieved
Area Development Franchise – Sa area development franchise, si franchisee has the right to open more
than one unit during a specific time and specified area. Sa area development, si franchisee ay pipili ng isang
specific place or location. Halimbawa ang pinili mong area ay batangas city. Ikaw lang ang papayagan ni
franchisor na mag-operate ng fracnhise sa buong batangas. Si franchisor ay walang ibang pwedeng payagan
na ibang magpatayo ng franchise sa batangas city kundi ikaw lamang since ang nagging agreement is area
development under ng multi-unit franchise.
Master Franchise – A master franchise agreement gives the franchisee more rights than an area
development agreement. In addition to having the right and obligation to open and operate a certain number
of units in a defined area, the master franchisee also has the right to sell franchises to other people within
the territory, known as subfranchises. Therefore, the master franchisee takes over many of the tasks, duties
and benefits of the franchisor, such as providing support and training, as well as receiving fees and
royalties.
Unlike the area development structure, the subfranchise structure involves three parties (the
franchisor, subfranchisor and subfranchisee),
Vertical Integration – meaning a whole supply chain of the company is controlled and owned by the
organization.
Licensing – inaallow mo na ipagamit ang trademark na meron at katulad ng sa franchising, nakakakuha
tayo ng payment mula kay licensee
sales nila
Joint Venture – it is a business arrangement in which 2 or more partners agree to pool their resources for
the purpose of accomplishing a specific task. This can be a new project or any other business activities.
Each of the participants in a joint venture is responsible for profits, losses and cost associated with it.
Dealerships – Dealership is the ability to buy and sell a specific product or service from another company.
So, a dealer is a company or person that works as a retail distributor. In short, they have been contracted by
a party to sell products to the public. They do not make products of their own but instead, they help in the
sale and distribution of goods and services from other organizations. A distributor is not permitted to
operate under the trademarked name of the company whose products it distributes. Instead, the distributor
operates under its own business name. It functions as a reseller of the products. They simply buy a bulk of
products from the company and then sell them to customers.
Sales Representative - Sales representative present and sell products or services to customers. They
contact potential buyers, present products, answer questions and discuss pricing. They are responsible for
generating leads and meeting sales goals. So if you are sales representative, you might get lot of
compensation or incentives but of course to be able to do that is you need to close a sale or meet the so
called “quota”. So sales rep have to meet their quota to be able to get commission or the incentives. For ex.
I have given 1 month to close 10 sales. So if I haven’t been able to close that 10 sales within 1 month then I
am not qualified to get the incentive.
Exemption - Based Franchising - The Federal Trade Commission Franchise Rule (‘FTC Rule’) requires
franchisors to prepare and deliver a franchise disclosure document to a prospective franchisee before
offering and selling a franchise. California law likewise requires a franchisor to prepare disclosure
document and register it with the California Department of Business Oversight before it may offer or sell a
franchise in the state. However, there are circumstances when a disclosure document is not required to be
prepared and delivered or the franchise offering registered. The CFIL includes an exemption from its
registration and disclosure requirements for ‘experienced franchisees.’