ABSTRACT
This chapter focuses on franchising and franchising strategies. It distinguishes business format franchising from product and trade name franchise systems and describes why an entrepreneurial person might become a franchisee rather than founding a new business, as well as what might make a candidate hesitate to join a franchise system. The chapter explains why firms with a business model might opt for franchising rather than expand by setting up their own branches run by employee managers and also outlines features of businesses that are poorly suited to franchising. Chapter 8 describes the essential elements of a franchise contract and why contracts are so important when franchising. It compares the positive and negative features of a business that mixes franchisees with company-owned outlets, describes why most franchising systems evolve into this mixed form, and explains the logic of multi-unit franchising. The chapter discusses the biggest problems a franchisor faces once a business becomes clearly viable, assuming it survives the founding stage, and discusses the opportunities and challenges that the omni-channel approach presents to franchisors.
