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Franchising

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High initial start-up costs. Management fees, royalties, required purchases ... Decreased flexibility (changing market conditions) Disadvantages of Franchising ... – PowerPoint PPT presentation

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Title: Franchising


1
Franchising
Source The Economic Impact of Franchised
Businesses, Volume II Results for 2005 Prepared
for The International Franchise Association
Educational Foundation, 1/31/08
2
Economic Impact of Franchise Businesses (U.S.)
  • 909,253 franchised business establishments in the
    U.S.
  • Provide more than 11 million jobs
  • 8.1 percent of the national private-sector
    workforce

3
Economic Impact of Franchise Businesses (U.S.)
  • Annual payroll of 278.6 billion
  • Produce goods and services worth 880.9 billion
    per year

4
Advantages of Franchising
  • Proven idea/concept
  • Established best practices
  • Recognized brand name and trademark
  • Established support systems
  • Training programs in place

5
Advantages of Franchising
  • Products more easily obtained
  • Discounts
  • Shared advertising/promotion costs
  • Wider audience reach
  • May be easier to sell

6
Disadvantages of Franchising
  • High initial start-up costs
  • Management fees, royalties, required purchases
  • Lost independence
  • Decreased flexibility (changing market conditions)

7
Disadvantages of Franchising
  • Risk of franchisor failure
  • Shared bad press
  • Difficulty in selling (franchisor approval of
    buyer)
  • Shared profits with franchisor

8
Economic Impact-Nebraska
  • 6,799 franchised business establishments in
    Nebraska
  • 82,392 jobs

9
Jobs In Franchises (by Congressional District)
  • District 1 31,015
  • District 2 35,538
  • District 3 21,503

10
Jobs created BY franchises(By Congressional
District)
  • District 1 42,258
  • District 2 59,908
  • District 3 29,180
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