Question

Is Franchising beneficial from Franchiser perspective? Yes, or No, Defend your answer with fact and

theory. At least five reasons to justify the answer

Answer 1

Yes I do think that franchising is beneficial from the franchisor point of view because of following reasons-

A. Franchising will be helping in capitalised expansion of their existing business and many of the business will generally be taking loans for themselves to expand but franchising is generating the money also and it is leading to expansion also for franchisor.

B. There is another benefit related to franchising in respect to the franchisor as they will be getting the talented managers in form of franchisee who are highly responsible to take care of their business.

C. franchising will also be leading into economies of scale for franchisors because it will be helping them to to generator leverage in their supply chain and increase their purchasing power and cutting the cost.

D.it will be leading to continuing revenue streams for the franchisor when the franchising is done because this will be generating higher revenues for the franchisor at regular intervals and this will be increasingly liquidity in the business

E. Franchising is also resulting into brand development for franchisor as he will be able to expand the brand of his business with the help of franchisee and it would be leading into a local recognition of the brand so it would be increasing the market share of the franchisor.

Hence due to these reasons it can be said that franchising is a beneficial exercise for franchisor as it would be leading in to higher expansion of the brand and revenue generation as well as economies of scale and it would be advantageous for business in long run.