Chapter 7: Franchising and

Entrepreneurship
 Types of Franchising
Business format franchising:
• Single Unit
• Multiple Unit
• Area Franchise
• Master Franchise
 The Potential Benefits of Franchising

• National economic benefits

• Franchisor benefits
• Franchisee benefits
 National Economic Benefits
• Creates employment
• Contributes to tax revenue and GDP
• Encourages capital investment and stimulates
economic growth
• Encourages the transfer of knowledge and
innovation between countries
• Contributes to local tourism development or
regeneration by stimulating entrepreneurship and
innovation
 Franchisor Benefits
• Access to financial resources of franchisees to
support network growth
• Access to human capital to support network
growth
• Access to local market knowledge of franchisees
• Greater brand awareness
• Greater control of network as franchisees have
vested interest
 Franchisee Benefits
• Access to a recognised brand name
• Access to the knowledge required to operate their franchised
unit
• Ability to open own business quickly
• Access to a ready made customer base
• Access to ongoing operational and marketing support
 Franchising and Entrepreneurship

• Franchisors as entrepreneurs
– Develops business concept after identifying opportunity
• Franchisees as entrepreneurs
– Conflicting opinions
– Antithesis of entrepreneur vs. motivated, risk- taking innovators
• Franchising as an entrepreneurial partnership
– Entrepreneurial orientation