Franchises Difficult decision You want to

Franchises

Difficult decision • You want to start a business but no-one knows your name or your company • You are not sure if your business will be a success • You can’t afford to take a BIG risk with your money. . • What should you do?

What do you think? • Buy a franchise? • Less risk • Support of a big company • More sales • Go to alone as an “independent”? • More profit • More control

How many franchises can you think of? You probably know more than you realise!

How many did you get? Bagel Nash Chicken Cottage Dixy Chicken Favorite Chicken Frankie & Benny's Greggs Harry Ramsden's Little Chef Millie's Cookies Pret A Manger Shakeaway Spud U Like Square Pie The West Cornwall Pasty Company Wimpy

What is a franchise? • Imagine a company has a great and successful business. It wants to expand but it doesn’t want the problems and expense of opening more stores – so it sells the business idea. • If you buy a franchise it is a “business in a box”, as well as signage and training you get support of a national company and a brand that customers already know.

How much is a franchise? How much do you think it costs to buy a business franchise? What kinds of start-up costs do you think there might be?

Videos to watch • Link – Papa Johns franchise • Link - Little Caesars (8 minutes) franchise • Link – Dominoes pizza (3 minutes) franchise

What would you need to start a pizza delivery business? • Write a list of everything you think you will need. . . from ovens to a delivery van. .

List. . . how did you do? • • • Ovens and kitchen equipment Delivery van Premises Staff Raw ingredients (pizza dough) Boxes A phone A Fridge A till A PIN machine. . . maybe lots more. .

How can a franchise help MARKET a product? • Promotion - The Franchisor can afford to advertise nationally so the franchisee benefits from that • Price – Its is a known brand (through the advertising) so the franchisee can charge more for the pizzas • Place – The Franchisor can help set up the new restaurant in a good location and can help with research and architects • Product – the pizza that is unique to that company will be already well known because of all the national advertising (e. g. Who is stuffed crust? ? !!!)

Pros and cons of using a franchise to MARKET a product Advantages • Group advertising on a National even a worldwide basis • Market research done at HO level, you will get the benefit of the information • Promotional activity and signage all done on a national level (think Mac. Donald's promotions for happy meals) • Less competition as territories are divided up • Well known brand name and reputation Disadvantages • Less control for the franchisee they have to run the promotions that are currently being advertised • Having to pay royalties to the franchisor and having to buy their product – the rest of the expenses would be there if you bought a franchise or not • Some franchise contracts you have to pay marketing fees

So what do you need to do Write a report 1) Title ‘Pizza Business’ 2) Franchise or independent explain which one and why 3) List of the things needed to set up the business with costs. 4) Where to locate your business in town, Mutley or somewhere else. Explain where you will locate the business and why. 5) Explain the types of pizza you want to sell 6) Explain your prices, two for £ 10, psychological pricing £ 3. 99 7) How are you going to promote your business, newspaper(The Herald, Internet and local Cinema).