October 16, 2013 1

October 16, 2013 2

Session 2Tactical Franchise Format

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Channels to market?Potential routes-to-market…

• Retail• Direct• Reseller• Wholesale• Online• Multi-level• Mobile

…or a matrix!

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Leveraging options?Options for leveraging your business…

• Corporate financing• Franchising• Co-operative• Joint Venture• Merger & acquisition

…or a matrix!

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Franchise types – Single & Multi-Unit• Single-unit (direct-unit) franchise

• Rights to open & operate ONE franchise unit. Simplest & most common format. Possible to purchase additional single-unit franchises, thus a multiple / single-unit

• Multi-unit franchise• Area development

• Right / obligation to open & develop more than one unit, during a specific time, within a defined territory

• Master franchise (sub-franchising)• Additional to above - right to grant sub-franchises within the territory. Takes over

certain franchisor tasks, duties &benefits, such as support &training. Receives portion fees &royalties

• Area representative• Multi-unit hybrid. Territorial right to grant & service unit franchisees in the territory.

No direct unit franchisee contract (direct with franchisor). Receives portion of the initial & ongoing fees

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Franchise alternatives• Distributorship

• Contractual relationship with supplier, to buy & sells. Familiar with local markets & customers. May do business with many companies, more than just the supplier/producer. May not receive contractual support & training from the supplier/producer like franchisees

• Licensing• Licensee pays for the rights to use a particular trademark, without

the same significant control over the operations. Licensors mainly interested in royalties and supervising the use of the license rather than influencing the operations of the business

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Franchise Knowledge Series International Workshop on Franchising & Business Growth

20 October, 2013