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MGS 735 Elements Of Business Administration

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Answer:

Task A: The Concept Of Franchising

When different individuals owning businesses share a brand name, the act derives a model referred to as franchising.  In such a case, there is a parent company that allows other businesses to enjoy the strategies of such a company; the parent company, however, requests for royalties and initial fee based on revenues from the franchisees. They also provide the franchisees with the support that includes training and advertising services (Mitchell, 2017). This model of franchising happens to be a cheaper and quicker way of ensuring expansion. Such is due to the fact that the parent company, in this case, incurs less cost through owning and operating new stores. On the contrary, there is a lower potential for realizing revenue growth since the parenting company will receive a percentage of what the franchisees earn (Laihonen, Lönnqvist, & Metsälä, 2015). Currently, several industries have adopted this kind of model with regards to the International Franchising Association. The financial records indicate that the sector pockets an annual amount of approximately $1.5 trillion in the form of revenues (Mitchell, 2017).

Task B: Different Types Of Franchises And Associated Factors

  1. Integrated Business Operations

This is a franchise that uses the IBP concept for the purpose of have business planning functions connected. According to the strategy of this franchise, the available departments of a given business organization align their operations with regards to the financial performance of that particular organization (tfbadmin, 2013). The key factors associated with this type of franchise include:

  1. Work Processes: - which include all the routines that are associated with the existing processes
  2. Training of the employees
  3. Scheduling: - Managers are associated with the creation of schedules for the purpose of having resources coordinated.
  4. Single product franchise

This kind of franchise happens to be the most common (tfbadmin, 2013). The relationship in single-unit franchise involves the franchisor having its franchise granted the rights of operating in a single location while using its franchisor’s service marks, trade name, and operating system. The key factors associated with this type of franchise include:

  1. They work as the core operators
  2. Have low costs of acquisition
  3. It is a slower unit for franchisors
  4. It is a more expensive unit for franchisors

Manufacturing and wholesale franchise

This kind of franchise involves a franchiser offering grants to a wholesaler company to sell products in batch using the trademark and the name of the franchisor. This kind of franchise is associated mostly with companies involved in food and beverages. The key factors associated with this type of franchise include:

  1. Royalty for the trademark offered to the franchisee
  2. Advisory services offered to the franchisee
  3. The franchisor collects a percentage of the unit’s sales

Manufacturing and Retail Franchise

This kind of franchise involves a franchiser offering grants to a retailer to sell products in small quantities to consumers using the trademark and the name of the franchisor. Such franchises are associated with different kinds of industries like IT, food, and leisure, among others (Boundless, 2017). The key factors associated with this type of franchise include:

  1. The owner of the franchise operates from an outlet that is retail in nature
  2. Revenue is provided through the selling of brands that are well established

Require customer base for the purpose of sales creation

  1. They are vigilant when it comes to customer satisfaction
  2. Wholesale, retail franchise

This kind of franchise involves a wholesale franchiser buying products in bulk from different manufacturers and in return, sells them to the retail franchisee at lower prices compared to the ones at other retail outlets (Boundless, 2017). The key factors associated with this type of franchise include:

  1. Revenue is provided through the selling of products at relatively lower prices to retail franchisee
  2. Deal in buying goods from manufacturers in bulk
  3. They are vigilant when it comes to customer satisfaction

Retail product franchise

They also operate from retail outlets and sell brands that are well established (Boundless, 2017). The key factors associated with this type of franchise include:

  1. Deals in brand that is well established and proven to generate revenue
  2. It is associated with different industries
  3. Requires the right location and a proper customer base for establishment

Retail service franchise

They also operate from retail outlets, but instead of dealing in products, they offer services to consumers (Boundless, 2017). The key factors associated with this type of franchise include:

  1. Offer services that are well established and proven to generate revenue
  2. It is associated with service providing industries
  3. Requires the right location and a proper customer base for establishment

Ideas franchise

This kind of franchise involves idea providing firms allowing franchisees to sell consultancy services using the trademark and the name of the franchisor. This kind of franchise is associated mostly with companies involved in consultancy. The key factors associated with this type of franchise include:

  1. Royalty for the trademark offered to the franchisee
  2. Advisory services offered to the franchisee
  3. The franchisor collects a percentage of the unit’s sales

Intellectual property franchise

Involves an agreement between a franchise and its franchisees with particular provisions allowing the franchisees to use their franchisor’s trademark for the sole purpose of competing among themselves and not any other company (Bellemare, Carrier, Nielsen & Piller, 2017). The key factors associated with this type of franchise include:

  1. The intellectual property must be protected
  2. Franchisors obtain trademark attorney in case the agreement is breached

Task B: Part 2

Examples of franchises: -

  1. Rocket Chemicals Company in the U.K is a single-product franchise.
  2. Coca-Cola Limited is a global manufacturing wholesale company

Task C

  1. Business idea for franchising

Employees are safer and secure when they are engaged in errands that are confidential and protect their rights. ISA is, therefore, a program that touches on areas concerning information protection approaches within any organization. ISA is a sector that is growing fast and has a proper employment outlook. It requires problem-solving and critical thinking techniques (Hewitt, 2016). Individuals in this sector must also be tolerant to stress. ISA can be incorporated in:

  1. IT
  2. Data security administration

Suitability of franchising in terms of the service’ nature:

ISA is a sector that is growing fast and has a proper employment outlook. It requires problem-solving and critical thinking techniques. Individuals in this sector must also be tolerant to stress (Hewitt, 2016). ISA can be incorporated in:

  1. IT
  2. Data security administration
  3. Information security analysis
  • Information systems security analysis
  • Information technology security analysis

Likelihood of success: - ISA will describe an institution's ability to protect both data and information and the systems in which data resides. Its framework will ensure that confidentiality and integrity of the available information are achieved. The technology also includes strategies for attaining accountability and protection of the same data available in the systems (Aon, 2016).

Cost Structure for the ISA project

Sr. No.

Description of Assets

Costs

Policy Premium

1

Resources

$62,000

0

2

Benefits

$36,000

0

3

Inclusion rights

$1,738,300

0

4

Payments and Liabilities

$1,680,000

0

5

Goodwill

$480,000

0

6

Royalties

$66,000

0

7

Other resources

$1,130,000

0

 

TOTAL

$5,192,300.00

0

Task D

IFA Franchising operations

IFA is a business franchise that operates by implementing and managing practices and programs in relation to business administration, financial coaching, and sales support of franchisees. The areas that the organization offers mentorship include:

  1. Financial projections and planning
  2. Vendor coordination
  3. Benchmark metrics development
  4. Enhancement of components of business administration
  5. Development of business administration programs
  6. Provision of support and implantation for launched business programs
  7. Responsibility of franchisers in relation to products supply

Madam Susan E. Black-Beth happens to be the Chief Operating Officer. Susan, as the Chief Operating Officer, is in charge of ensuring that the relationship with the franchisees is maintained. She is in charge of transfers, branding, marketing, and social media (Ke & Wei, 2006).

Responsibility of franchisers in relation to products provision

The C.E.O; Madam Nancy A. Bigley Nancy Bigley focuses in the operation systems design area, execution, management of relations, implementation, and development of strategic plans for initiating growth. As CEO of Bottle & Bottega, she is responsible for overseeing the creation of art parties and wine for private, public, and corporate occasions (Ke & Wei, 2006).

Responsibility of franchisers in relation to business training support

Creating awareness and offering training is one of the core components of IFA’s strategy that is designed to ensure that users' compliance with the network and organizational system within the departments is strengthened (Ke & Wei, 2006). The strategy of creating awareness or offering training will work in association with the organization’s statutory and audit requirements (Ke & Wei, 2006).

Responsibility of franchisers in relation to operational support

IFA describes the franchise’ ability to focuses on the operation systems design, execution, management of relations, implementation, and development of strategic plans for initiating growth. It also educates the franchisee using a well-documented framework that ensures operational confidentiality and integrity (Ke & Wei, 2006).

Responsibility of franchisers in relation to marketing and promotions support

The franchiser uses the Meraki Analytics tool for enabling the displaying of real-time location statistics for its franchisees. In such a way, engagement and loyalty of consumers can be improved in different sites (Amirkhanpour, Vrontis & Thrassou, 2014). The tool can also utilize the intelligent access points in ensuring that actual data location is conveyed to the clients (Amirkhanpour, Vrontis & Thrassou, 2014).

Responsibility of franchisers in relation to franchise establishment support

IFA operates by implementing and managing practices and programs in relation to business administration, financial coaching, and sales support of franchisees (McClendon, & Ho, 2016). The areas that the organization offers mentorship include:

  1. Financial projections and planning
  2. Vendor coordination
  3. Benchmark metrics development
  4. Enhancement of components of business administration
  5. Development of business administration programs

Reference

Allurwar, N., Nawale, B., & Patel, S. (2016). Beacon for proximity target marketing. Int. J. Eng. Comput. Sci, 15, 16359-16364.

Amirkhanpour, M., Vrontis, D., & Thrassou, A. (2014). Mobile marketing: a contemporary strategic perspective. International Journal Of Technology Marketing, 9(3), 252. http://dx.doi.org/10.1504/ijtmkt.2014.063855

Bellemare, J., Carrier, S., Nielsen, K., & Piller, F. (2017). Managing Complexity (1st ed.). Cham: Springer International Publishing

Boundless. (2017). Types of Franchises. Boundless. Retrieved 18 June 2017, from https://www.boundless.com/business/textbooks/boundless-business-textbook/types-of-business-ownership-6/franchising-52/types-of-franchises-257-1725/

Hewitt, A. (2016). Engaging and Retaining Top Performers. Retrieved 26 May 2017, from http://www.aon.com/attachments/human-capital-consulting/Engaging_and_Retaining_Top_Performers.pdf

 Ke, W., & Wei, K. (2006). Organizational Learning Process. Journal of Global Information Management, 14(1), 1-22.

Laihonen, H., Lönnqvist, A., & Metsälä, J. (2015). Two knowledge perspectives to growth management. Vine, 45(4), 473-494. Retrieved from http://queens.ezproxy.cuny.edu:2048/login?url=http://search.proquest.com.queens.ezproxy.cuny.edu:2048/docview/1732776855?accountid=13379

McClendon, K., &Ho, T. (2016). Building a Quality Assessment Process for Measuring and Documenting Student Learning. Assessment Update, 28(2), 7-14.

Mitchell, M. (2017). Concept:Franchising. Wikinvest.com. Retrieved 17 June 2017, from http://www.wikinvest.com/concept/Franchising

Tfbadmin. (2013). Franchise Operations Archives - The Franchise Builders. The Franchise Builders. Retrieved 18 June 2017, from http://www.thefranchisebuilders.com/category/franchiseoperations/page/2/

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