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GROUP- 7
DEFINITION
A type of license that a party (franchisee) acquires to
allow them to have access to a business's (the
franchisor) proprietary knowledge, processes and
trademarks in order to allow the party to sell a product
or provide a service under the business's name. In
exchange for gaining the franchise, the franchisee
usually pays the franchisor initial start-up and annual
licensing fees.
FEATURES OF FRANCHISE
Well established business
Needs limited investment
Easy entry in new markets
Helps in diverting business risks
Allows use of brand name and trademark
CATEGORIES IN FRANCHISE
Advertisement & Media
Automotive
Beauty & Health
Business Services
Dealers & Distributors
Education
Entertainment
Fashion
Food and Beverage
Home Based Business
Hotels and Resorts
Manufacturing
Retail
BRAND
BEAUTY SALOON
COSMETICS
TATOOS
BRAND
Diet Consultancy
Hospitals
Restro, Apollo
Pathological Labs
2. FASHION
2.A) ACCESSORIES
SUB- SUB CATEGORIES
BRAND
Fashion Accessories
Opticians/Eye Wear
2.B) CLOTHING
SUB- SUB CATEGORIES
BRAND
Departmental/Unisex
Ethnic Stores
Kids Wear
Jockey, Lovable
Textiles
Woollens
Monte Carlo
2.C) FOOTWEAR
SUB- SUB CATEGORIES
BRAND
Casuals
Lotto, Crocs
Designers
Formals
Kids
Willy Winkies
Sports
Reebok, Liberty
2.D) JEWELLERY
SUB- SUB CATEGORIES
BRAND
Precious Jewellery
3. RETAIL
BRAND
Books Stores
Florists
Kids/Candy Stores
Om Publishers, Solo
Toy Shops
BRAND
Consumer electronics
Mobile &
Communication/Internet
Connections
Photography
BRAND
Grescasa,
Garden Stores
Handicrafts
Hardware Stores
Home Security
Livfuture
Kitchen
BRAND
Fitness Equipment
Triumph sports
Golf Stores
Food Marts
Grocery Stores
Kiosks
Koncept Retail
Organic Products
Pet Store
Superstores
Wine Shops
DEFINITIONS
JOINT VENTURE
Ajoint venture(JV) is a business agreement in which
the parties agree to develop, for a finite time, a new
entity and new assets by contributing equity. They
exercise control over the enterprise and consequently
share revenues, expenses and assets.
EXAMPLE: STARBUCKS AND TATA
DISTRIBUTION
Distributionis the process of making a product or
service available for use or consumption by a consumer
or business user, using direct means, or using indirect
means with intermediaries.
EXAMPLE: Pepsi, bisleri, arvind mills.
LICENSING
The verblicenseorgrant licensemeans to give
permission. The nounlicense refers to that permission
as well as to the document recording that permission.
EXAMPLE: Microsoft office
FRANCHISING
Franchisingis the practice of the right to use a firm's
business model and brand for a prescribed period of
time.
EXAMPLE: Mc Donalds, Subway
DIFFERENTIATION
Distribution
Licensing
Franchising
Joint
Ventures
Merger and
acquisitions
Distributor sells
the goods to
dealer and
distributor gets
it from the
manufacturer.
1. Licensor
owns patent or
secret of
technology
(Technology
license)
2. License to
manufacture
and sell
according to
licensor
specifications
(Trademark/
collateral
product
licensing)
1. Gives the
franchise to
work under pre
packaged
business format
, provides initial
training and
assistance in
establishment
(packaged
franchising)
Entities
associate to
earn profit and
share.
Merger is legal
consolidation of
two
companies .
2. Product
franchising
merely an
outlet of the
goods.
Acquisition
one company
takes over
other.
.
Distribution
Licensing
Franchising
Lower capital
employment
Income without
significant
investment or
effort
Lower capital
expense then
company owned
outlets
Flexibility in
structuring and
growing in
business
Distributor /
dealer assumes
the loss on the
product
purchased from
the
manufacturer
Licensor to
Receive income
without financial
risk
Most of capital
Risk is absorbed
by franchisee
(he becomes a
responsible
employee )
Capital risk is
shared
Increase
In Assets and
resources.
To gain
competitive
advantage or
edging
technology
Distribution
Licensing
Franchising
Dealers pay
taxes
Licensee pays
taxes
Franchisee pays
taxes
Advertising
All expenses
expense are
incurred by the
incurred by
licensee
dealer or shared
by the company
More interested
in business
expansion
Loss of control
over sales for
the company
Limited or no
control for
licensor and no
goodwill of the
licensee
business
activities.
Franchisor
Greater control
control over the then dealer and
operations to
distributorship
check the
marketing of the
product.
The company
which acquires
has all the
controls.
Distributor may
sell competitors
product
Partnership
disputes
Assets and
liabilities
manage by a
single enity
THANKYOU