Franchising Frederick Tan 26 feb 2013

Franchising Frederick Tan 26 feb


Components
- franchise contract
- operation manual
- upfront franchise fee
- ongoing royalties

1. Trademark
2. Codified system
3. Territory
4. Term or duration

Advantages
- operating systems
- formal training program
- synergy A&P
- Economies of scale

Disadvantages:
- rules
- complex legal documents
- reputation management
- limitations on products and services and offerings.

~After 3 years, learn
~After some time, they will teach and suggest ideas for promotions and marketing strategies
~ have performance clause

Differences between Franchising and Licensing
= cost of establishing and operating the business
= freedom in the opration of the business
= setup
= control and support
= exclusivity and competition
- trading area. To stay within this area.
- licensing, less defined area
- the more control u have the more franchising it is. Else, licensing.

Licensing
- service related.
- educational training program

7-eleven franchise but is more like licensing.
- selling convenience
- Even when another store is nearby, it's still not so bad.
-
Secrets behind the Golden Arch, Macdonalds

Fish & Co vs Fish market in Mahattan

Refranchising
/ working on products and promotions and overall strategy.
/ don't need to be running the stores themselves.

Demographics
- Gen Y
: confident, tech savvy,
: 20% economic active


Growth Segments potential
-Business consultants / services / training
- F&Beverage
- 'green' businesses (revamp buildings. solar panels)
- fitness, health and personal care
- financing (micro-financing)

Aging population so there's more emphasis on health, lifestyle and help for the aged. Products and services that they need.


>> select the right partner. Good friend doesn't mean will be good partner.
>> careful not to be pressured into taking up a franchise.
>> do a 3 year cash flow projection
>> hired a couple. Can save on housing. So both came and went together.
>> commit to the product and do not stray from it.
>> do market research first.
>> plan bonuses and incentives


---- ----- -----
Marketing Management :
Customer seg, demarcating trading area, formulating average collection period and average customer value.
Franchise Financing Management : Payback period, heat rate, and exit point and pricing your franchise.

Riches in Niches - be selective
Brand Recall -

Operational management : creating codified operational manual and systems.

Current Ratio - how to delineate COGS vs OPEX that accurately reflects annual cycles?
Profits are applause to product: how to plan and execute a budget that includes room for the joys of the business.

Franchise Setup manual - how to generate leads and acquire sales within the setup timeline

Operational manual.

Leadership Management : building a winning team, creating the great game of business.

Open book management : how to grow business using weekly huddle

Talent Management : build a sustainable team at talent using triple bottom line.