Экономические науки/4. Инвестиционная
деятельность и фондовые рынки.
Студентка группы МЗД-11д
Рабей Н. Р.
К. п. н. Сикорская Л. О.
Винницкий
торгово-экономический институт Киевского национального торгово-экономического
университета, Украина
Franchise as a kind of confidence to
excellent financial future
Modern
world requires unique people, unique ideas. Nobody is interested in old-fashioned
business ideas. They are already used and their authors are getting profit. But
what should young entrepreneurs do? If you are not a young perspective
scientific or Harvard’s graduator, you should make up your own good in order to
be in business.
Finally,
you have an idea to manufacture some products, but what would you do, if your
product isn’t successful? How will you be paying credits? Running business is a
great risk, but, fortunately, there is safer variant to become a businessman.
Franchise is an only opportunity to decrease risk,
when establishing a business. What is a franchise? Franchising
is not a business itself, but a way of doing business. A
franchise is a right granted to an individual or group to market a company’s
goods or services within a certain territory or location. Some examples of
today’s popular franchises are McDonald’s, Subway, Domino’s Pizza, and the UPS
Store [3].
There are many different types of franchises. Many
people associate only fast food businesses with franchising. In fact, there are
over 120 different types of franchise businesses available today, including
automotive, cleaning & maintenance, health & fitness, financial
services, and pet-related franchises, just to name a few [4].
If you are thinking about
buying a franchise, it is important that you understand exactly how franchising
works, what fees are involved, and what is expected of you from the franchise
company.
An individual who purchases and runs a franchise
is called a «franchisee». The franchisee purchases a franchise from the «franchisor». The franchisee must follow certain rules and
guidelines already established by the franchisor, and in most cases the
franchisee must pay an ongoing franchise royalty fee, as well as an up-front,
one-time franchise fee to the franchisor. Franchising has become one of the
most popular ways of doing business in today’s marketplace [4].
There are many
advantages to buying a franchise. Some of these advantages are:
1.
Corporate image - The corporate image and brand awareness of the company is already
established. Consumers are always more comfortable to purchasing items from a
familiar name or company they trust.
2.
Training - The franchisor usually
provides extensive training and support to the franchise owner.
3.
Savings in time - Since the franchise company already has the business model in place
you can focus on running a successful business.
Ukraine is going to European Union. So, we will look through the franchise history in
the EU’s countries.
The U.K. franchise market is one of the most appealing
to U.S. franchisors because of the commonality of language. It is also the most
active and developed in Europe. With a significant downturn in the British
economy and an increase in the amount of skilled workers becoming unemployed,
the quality of potential franchisee leads has improved
[1].
France has a well-developed franchise industry. It’s
estimated that there are 37 U.S. franchise brands operating in France with
Century 21 ranking as the third most popular franchise.
Franchising is not very developed in Germany. In fact,
not many German people are familiar with the concept of a franchise system.
Regardless, franchising is still growing there.
The Spanish economy is developing to embrace more
franchises each year and will most likely become a larger contender in
international franchising in the future. According to the Spanish Franchise
Association report, there are 919 franchise brands in Spain, while 18 percent
are from other countries [1].
In
recent years, the idea of franchising has been picked up by the social
enterprise sector, which hopes to simplify and expedite the process of setting up
new businesses. A number of business ideas, such as soap making, wholefood
retailing, aquarium maintenance, and hotel operation have been identified as
suitable for adoption by social firms employing disabled and disadvantaged
people.
The most successful example is probably the CAP Markets, a steadily
growing chain of some 50 neighborhood supermarkets in Germany. Other examples are the St. Mary’s
Place Hotel in Edinburgh and the Hotel Tritone in Trieste.
Social
franchising also refers to a
technique used by governments and aid donors to provide essential clinical
health services in the developing world.
Franchising provides a means to overcome traditional obstacles faced by
women and minorities: a lack of business experience and capital. Most
franchisors offer ongoing training and assistance. Some will even work out
property leases, and provide financing for equipment and the franchise itself [2].
For example, more than 400 U.S. franchise systems operate
internationally. Consumers from Poland to Peru recognize famous brands as
symbols of quality, consistency, service and value. So, franchise is a
possibility for businessmen to be sure in their financial future.
REFERENCES
1.
The biggest trends in Franchising / [Electronic resource]: http://www.forbes.com/sites/kevinharrington/2013/10/31/the-biggest-trends-in-franchising/
2.
The Franchisee Lifecycle Concept – A
New Paradigm in Managing the Franchisee-Franchisor Relationship / Proceedings
of the 14th annual International Society of Franchising Conference, San Diego,
California, February 19-20, 2000.
3.
Directory of franchises "Buy a successful business". – Кiev :
Franchise Association, UCMGroup LLC, 2005. – 84 с.
4.
How Franchising Works / [Electronic resource]: http://money.howstuffworks.com/franchising1.htm