Case study

Case study

Introduction

The purpose of this study is to expand the boundaries of our knowledge by exploring some relevant and factual information relating to the analysis of a case of an individual working for a franchise company. It's a case of an individual named John Phillips, who has been offered a promotion but has the skills to be a supplier or has an opportunity to purchase and operate a franchise.

Franchising is the new way of starting and operating a small business which is more successful than establishing and involving in a new independent small business. Franchising is a method of doing business whereby a company (the franchisor) grants to others (the franchisees) the rights to produce, distribute, sell, or market the company's products or services. In doing so, franchisees are permitted to use the franchisor's name, reputation, trademark, procedure and selling techniques. To obtain these rights, each franchisee agrees to pay the franchisor a sum of money (the franchise fee), a percentage of annual gross sales, or both. This expansion of words of franchising “a method of doing business” is seen with different views. Many authors have cited it with this view of notion, “marketing system” and form of marketing and distribution and others found it methods of raising capital. Many others have cited it as the contractual business with franchising agreements. This franchise agreement highlights the rights and obligations of the two parties. Hence, all these citations give a view that franchising is more a marketing tool of doing business that distributes goods and services and it expands a business. It is frequently and enormously described as an “industry”. In an American culture it has been considered both as an enemy of the entrepreneur and even as the 'last hope' for the small businesses to compete against other retailers (Siegel, 2012).

In this paper, the author will examine the provided information and utilize external sources to present the pros and cons of each alternative as well as recommend a strategy for the individual.

Discussion

Following are the two possible alternatives john would have to deal with:

First, a franchise-consulting firm contacted him to see if he might be interested in joining their firm.

Secondly, a friend from his church named Phil approached John and Joan about a new business venture. Phil offered to provide the funding for John and Joan to open as many as a dozen locations in the Houston marketplace.

Pros and Cons of 1st Alternative

John would be able to gain several monetary benefits, if he opts to join the consultation company. First, John would not only become partner in the company, but he would also be able to work as an independent contractor operating for himself under company's brand and with some administrative support as well. Keeping in view John's operational support experience, as well as having been a franchisee, he would definitely be rewarded for his efforts and expertise. Secondly, having a share in profit earned by the company is, undoubtedly, more beneficial, than earning a fixed ...