Franchising & licensing two powerful ways to grow your business

[...]... that has helped fuel our economy for nearly 100 years The factors discussed above help explain the rationale for the new subtitle to Franchising & Licensing: ‘ Two Powerful Ways to Grow Your Business in any Economy.’’ History has shown that the leveraging of intellectual capital can be an effective and capital-efficient way to perpetrate business growth whether economic conditions are weak or strong Companies... co-branding strategies to penetrate these new markets, again taking advantage of the trend toward convenience stores, grocery store chains, and gas stations all wanting to provide their patrons with an enhanced customer experience and offer a more comprehensive and integrated solution to their consuming needs And again, a trend toward branding and the ability to share costs, positioning toward differentiation,... system or prescribed business format that is operated according to a uniform and consistent trade identity and image is at the heart of a successful franchising program Therefore, a prospective franchisor must be able to reduce all aspects of running the business to be franchised into an operations and training manual for use by franchisees in the day -to- day operation of their business These systems... considering franchising as a method of getting into business, must understand the key components of this foundation: ❒ A proven prototype location (or chain of stores) that will serve as a basis for the franchising program The store or stores must have been tested, refined, and operated successfully and be consistently profitable The success of the prototype should not be too dependent on the physical presence... the franchisee struggles to remain competitive unless the franchisor delivers on its promises and is committed to providing excellent initial and ongoing training and support Reasons for Franchising There are a wide variety of reasons cited by successful franchisors as to why franchising has been selected as a method of growth and distribution Through franchising, they are able to: ❒ Obtain operating... the power of franchising as a system to get and keep more and more customers—building customer loyalty ❒ Achieve more rapid market penetration at a lower capital cost ❒ Reach the targeted consumer more effectively through cooperative advertising and promotion ❒ Sell products and services to a dedicated distributor network ❒ Replace the need for internal personnel with motivated owner/operators ❒ Shift... Sales & Distributorships (ProductDriven) & Routes Retail Store (Business Format Emphasis) ManagementDriven (Multi-Unit) Larger Territory or Region who manage or lead a team of managers on a permit or district basis as well as satellite carts, kiosks, etc Financial Investment (Large-Scale Projects–Hotels, etc.) Resources Needed/ Business Acumen Required/ Etc Lowest V Highest The Foundation of Franchising. .. Responsible franchising is the only way that franchisors and franchisees will be able to harmoniously co-exist in the twenty-first century Responsible franchising requires a secure foundation from which the franchising program is launched and a genuine commitment to the success of a franchisee Any company considering franchising as a method of growth and distribution, or any individual considering franchising. .. Capital to Create Growth Opportunities and Profitable New Income Streams Intellectual capital consists of human capital, intellectual property, and relationship capital and are the key assets for driving growth in all types of economic conditions The biggest challenge that many companies face is how to keep growing in a slowing economy The focus of this book is on two key strategies— franchising and licensing as... officers and directors (as well as qualified consultants) who understand both the particular industry in which the company operates and the legal and business aspects of franchising as a method of expansion ❒ Sufficient capitalization to launch and sustain the franchising program to ensure that capital is available for the franchisor to provide both initial and ongoing support and assistance to franchisees . Cataloging-in-Publication Data Sherman, Andrew J. Franchising & licensing : two powerful ways to grow your business in any economy / Andrew J. Sherman. —3rd ed. p. cm. Includes bibliographical. want to especially thank Bob Gappa at Management 2000, Jerry Darnell, John Rogers at Davis & Company, John Reynolds at the International Franchise Associa- tion, Tom Portesy and Richard Macaluso. POWERFUL WAYS TO GROW YOUR BUSINESS IN ANY ECONOMY ANDREW J. SHERMAN American Management Association New York • Atlanta • Brussels • Chicago • Mexico City • San Francisco Shanghai • Tokyo • Toronto