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WHAT OPTIONS
EXIST FOR
STARTING UP A
BUSINESS?
LEARNING OBJECTIVES
The principles of franchising as it
applies to small business start-ups
The advantages and disadvantages
of using a franchise as a means of
starting a new business; assess
franchising against other business
start-up options
How to identify a suitable start-up
location
FRANCHISE – WHAT IS IT?
A franchise is the right given by one business to other
businesses to sell goods or services using its name.
People who buy into the franchise remain as independent
businesses. Examples include:
FRANCHISOR
The business that gives the right for others to
sell their products and/or service. E.g.
McDonalds, Subway
What’s in it for the franchise owner?
Enables a firm to expand its sales quickly
They receive a share of the sales
Burger King receives 5% of all sales.
You can work on developing more
successful products
FRANCHISEEPeople or persons that agree to manufacture,
distribute or provide a branded produce, through a
license from the franchisor.
Why do it? What do you get?
An established brand name
Training
Ongoing
support
Equipment
Access to goods
and services
Advertising
and promotion
FRANCHISES
Advantages Disadvantages
Using your card sort, decide whether you card is a ad or disadvantage and create a
table to show it
FRANCHISES
Advantages
Brand already known
Customers already buying product
Less risk during start-up
Training & support provided
Keep most of the profits
Disadvantages
Less control as must do what the franchisor wants
Must pay royalties to franchisor
Cannot introduce new products without agreement from franchisor
IDENTIFYING A SUITABLE START-UP
LOCATION
Which town / city?
Which part of the city?
What do you want to be close to?
Is it the right match between shop size and cost?
Is this the right place for your business?
Who used this area? Who would be your customers?
Socio-economic / approximate social grade http://www.censusprofiler.org/
WHAT FRANCHISE WOULD BE
SUCCESSFUL HERE?
Habits and needs of
the customers in the
area
The cost of the lease and
fitting the propertyPractical requirements
such as floor space
HOW TO IDENTIFY A SUITABLE START UP LOCATION Divide a full page into 4 equal sections
Using p35-36
Explain the 4 steps you go through to decide upon an adequate location for your franchise
FRANCHISES
Franchise
Homework
Naked Pizza