The paper "Franchising - Howard Franchise Stores Australia" is a perfect example of a business case study. The preferred franchise for the target client is Howard storage world, an Australian franchise. The client will first get an overview of the franchise system and how it works in Australia. The details for the preference of this franchisor are discussed later in the report. 1.1 The Franchise system 1.1.1 Definition Franchising is a system of using a successful business model of another firm (Spinelli, et al. 2004). In this case, independently owned outlets (a franchisee) are assigned by the business owner (a franchisor) to distribute and market their services or products for a fee.
Under a trademarked name, the franchisor grants the right to operate a replicated business, using operational and marketing procedures and established management techniques. Besides the upfront capital fee, the percentage of gross monthly sales or ongoing royalty fees are also paid by the franchisee after agreeing to comply with franchising procedures (FCA, 2014). 1.1.2 Franchising models The major types of franchise models are; business format, product and process or manufacturing franchise. Under the business format franchise, the franchisor offers rights to use his or her intellectual property by the franchisee such as fast food outlets (Spinelli, et al.
2004). In the product franchise, the products of the franchisor are sold at retail or wholesale outlets by the franchisee sells such as motor vehicle dealerships. The franchisee is given exclusive rights within a specific area, to sell the product. Lastly, in the manufacturing or processing franchise, the product is produced by the franchisee. In this case, provides the ‘ know-how’ or an essential ingredient to the franchisee such as the model in the soft-drink industry (Sugars & Sugars, 2005). There are advantages and disadvantages to consider before deciding to buy a franchise.
With an established brand, the advantages could include assistance with involvement and marketing (FCA, 2014). On the other hand, strict operational procedures and the loss of decision-making autonomy could be disadvantages. Depending on which one selects, the cost of buying a franchise varies dramatically.
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Howard Storage World (HSW), 2014, Storage products and storage solutions. www.hsw.co.in/
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Spinelli, S Rosenberg, RM & Birley, S 2004, Franchising: Pathway to Wealth Creation, Prentice Hall, Upper Saddle River, NJ (ISBN: 9780768682069)
Sugars, B & Sugars B 2005, Successful Franchising, McGraw Hill Professional.