InterContinental Hotel Groups
InterContinental Hotels & Resorts started abroad as a subsidiary of Pan American Airlines, which sold the company in the 1980s. Today, there are almost 4,000 InterContinental Hotel Brands located worldwide. More so, the company is currently looking for more interested franchisees who want to become a part of such huge hotel group.
Total Investment: $5,146,120 – $93,857,535
Franchise Fee: $50,000 – $75,000
Ongoing Royalty Fee: 5-6%
Term of Franchise Agreement: 10 years (average), renewable.
Hilton Garden Hill
Hilton Garden Hill is a part of a huge name in the Hotel Industry – Hilton Worldwide; which currently has franchise units in 84 countries. Other Hilton brands include Waldorf Astoria Hotels & Resorts, Conrad Hotels & Resorts, Hilton Hotels & Resorts, DoubleTree by Hilton, Embassy Suites Hotels, Hampton Hotels, Homewood Suites by Hilton, Home2 Suites by Hilton and Hilton Grand Vacations.
Currently, Hilton Garden Hill are seeking for new franchise units worldwide.
Total Investment: $11,401,500 – $21,055,000
Franchise Fee: $75,000
Ongoing Royalty Fee: 5.5%
Term of Franchise Agreement: 22 years, renewable.
Knights Inn
Knights Inn was founded on year 1972 and is currently operated by Cendant Corporation. Knights Inn currently has franchise units in 230 locations within North America.
Unlike those other huge hotels, Knights Inn offers quite limited services yet a budget-friendly accommodation rate for those who want to save more. The company understands that not all can afford a high-class, high-rated hotel, so Knights Inn worked on some budget-friendly packages and rates which are more suited for the middle-class market.
Currently, Knights Inn are open for interested franchisees within the US and Canada.
Total Investment: $124,000 – $7,018,200
Franchise Fee: $7,000
Ongoing Royalty Fee: Varies.
Term of Franchise Agreement: 3 years, renewable.
What Is Franchising?
Franchising is one of the three business strategies a company may use in capturing a market share. The others are the company’s owned units or a combination of company owned and franchised units.
Ιt is a business strategy for getting and keeping customers. It is also a marketing system for creating an image in the minds of current and future customers regarding the way that the company’s products and services can help them. Finally, it is a method for distributing both products and services that satisfy customer needs. Franchising is a network consisted of interdependent business relationships that allow a number of people to share:
|
|
|
· A brand identification;
· A successful method of doing business;
· A proven marketing and distribution system.
In short, franchising is a strategic alliance between groups of people who have specific relationships and responsibilities with a common goal to dominate markets, i.e., to get and keep more customers than their competitors.
Actually, you are investing your assets in a system that allows you to utilize the brand name and provides you both operating system and ongoing support. Everyone in the system is licensed to use the brand name and the operating system.
It is a way of developing a successful, already known or an innovator business, where the franchisor grants the franchisee the privilege to start a sale’s point (shop), in which the franchisee can use the franchisor’s name, his know-how, his products and service, his system of products circulation, his promoting etc.
In order to be successful in franchising you must understand the business and legal ramifications of your relationship with the franchisor and all the franchisees. Your focus must be on working with other franchisees and the company managers to market the brand and fully use the operating system to get and keep customers.
Advantages of the Franchising System
There are countless benefits to becoming a Franchisee. Here is a short list of 18 advantages of Franchising over standalone forms of small business:
1. The Franchisor provides detailed training.
2. The Franchisee has the incentive of owning their own business with the additional benefit of continuing assistance from the Franchisor.
3. The Franchisee benefits from operating under the name and reputation (brand image) of the Franchisor, which is already well established in the mind and eye of the public.
4. The Franchisee will usually need less capital than they would if they were setting up a business independently because the Franchisor, through their pilot operations and buying power, will have eliminated unnecessary expense.
5. The Franchisor provides the advice and/or help in identifying suitable trading locations or operating territories for the Franchisee.
|
|
|
6. The Franchisor helps the Franchisee obtain occupation rights to the trading location, comply with planning (zoning) laws, prepare plans for layouts, shopfitting and refurbishment, and provide general assistance in calculating the correct level and mix of stock for the opening launch of the business.
7. The Franchisor trains the Franchisee (and very often, the Franchisee's staff as well) in all areas of the business such as; manufacture, preparation, accounting, business controls, marketing, promotion and merchandising.
8. The Franchisor may negotiate better rates of finance, or more favourable conditions, for Franchisees with financial institutions.
9. The Franchisee receives the benefit on a national scale (if appropriate) of the Franchisors advertising and promotional activities at a lower cost than if they were to attempt such marketing themselves.
10. The Franchisee taps into the bulk purchasing power and negotiating capacity made available by the Franchisor by reason of the size of the franchised network.
11. The Franchisee can call on the specialised and highly-skilled knowledge and experience of the Franchisor's head office organisation, while remaining self-employed in their business.
12. The support and benefits provided by a Franchise system greatly reduce a Franchisee's business risks.
13. The Franchisee has the services of the field operational staff of the Franchisor who are there to assist with any problems which may arise from time to time in the course of business.
14. The Franchisee has access to use of the Franchisor's patents, trade marks, copyrights, trade secrets, and any secret processes or formulae.
15. The Franchisee has the benefit of the Franchisor's continuous research and development programs, which are designed to improve the business and keep it up-to-date and competitive.
16. The Franchisor provides a knowledge base developed from their own experience, as well as that of all the Franchisees in the system, which would otherwise be impossible for a non-franchised business to access.
|
|
|
17. Defined territories of operation within the Franchise can help protect the Franchisee from competition.
18. A Franchisee can always speak to their Franchisor or a fellow Franchisee to discuss their business challenges.
Disadvantages of the Franchising System:
1. Inevitably, the relationship between the franchisor and franchisee must involve the imposition of controls. These controls will regulate the quality of the service or products to be provided or sold by the franchisee to the consumer. It has been mentioned previously that the franchisee will own his/her own business. However, the business which they own is one which they are licensed to carry out in accordance with the terms of their contract. They must accept that in return for the advantages enjoyed by them, by virtue of their association with the franchisor and all the other franchisees, control of quality and standards is essential. Each bad franchisee has an adverse effect, not only on his own business, but indirectly on the whole of the franchised chain and as such, all other franchisees. The franchisor, will, therefore, impose standards and demand that they are maintained so that the maximum benefit is derived by his franchisee (and indirectly the whole of the franchised chain) from the operation of the franchisee's business. This is not to say that the franchisee will not be able to make any contribution, or to impose their own personality on their business. Most franchisors do encourage their franchisees to make contributions to the development of the business of the franchised chain which their individual talent and qualities permit.
2. The franchisee will have to pay the franchisor for the services provided and for the use of the system, i.e. the initial franchise fee and continuing franchise fees.
3. The prospective franchisee may find it difficult to assess the quality of the franchisor. This factor must be weighed very carefully by the potential franchisee for it can affect the franchisee in two ways. A. Firstly, the franchisor's offer of a business-format package may not amount to what it appears to be on the surface. B. Secondly, the franchisor may be unable to maintain the continuing services which the franchisee is likely to need in order to sustain their business.
|
|
|
4. The franchise contract will contain some restrictions against the sale or transfer of the franchised business. This is clear inhibition of the franchisee's ability to deal with their own business but, as with most of the restrictions, there is a proper reason for it. This provision is in the contract because the franchisor will have already been most meticulous in their choice of the franchisee as the original holder of the franchise for this particular outlet. Why then should they be any less meticulous in their approval of a replacement? Naturally, they will want to be satisfied that any successor to the original franchisee is equally suitable for that purpose. In practice, there is normally very little difficulty in the achievement of successful assignments of the franchised business. Some agreements provide for the payment of fees to the franchisor to cover the costs of dealing with applications and training the new, replacement franchisees.
5. Franchisees may find themselves becoming too dependent upon the franchisor and fail to produce the personal drive which the system provides. Some franchisees lose their perspective. They delude themselves into believing that the franchisor has a duty to be so involved with their particular business to ensure that it has a flow of customers, and to provide a day-to-day involvement, which is inconsistent with franchising as a concept.
6. The franchisor's policies may affect the franchisee's profitability. For example, the franchisor may wish to see his franchisee build up to a higher turnover from which he gets his continuing franchise fee, while the franchisee may be more concerned with increasing his profitability, which does not always necessarily follow from increased turnover.
7. The franchisor may make mistakes in their policies. They may arrive at decisions, relating to innovations in the business, which turn out to be unsuccessful and detrimental to the franchisee. This is why franchisors are always urged to market test innovations thoroughly in their own company-owned outlets, and to be able to demonstrate to franchisees the cost effectiveness of introducing new ideas.
8. The good name of the franchised business and its brand image may become less reputable for reasons beyond their own control.
Дата добавления: 2018-06-01; просмотров: 412; Мы поможем в написании вашей работы! |
Мы поможем в написании ваших работ!