INTRODUCTION TO
BUSINESS
ASSINMENT- 3
• SUBMITTED TO: MD. SADIKUR RAHMAN
• PREPARED BY: JABIN TASNIN SOMA
• SESSION: 2023-24 ROLL: 2382186
• DEPARTMENT OF MARKETING
FRANCHISING
Franchising is a business model where a business (the franchisor) allows another individual or company
(the franchisee) to operate a business using its brand, trademark, and business methods in exchange for an
initial fee and ongoing royalties. The franchisee benefits from using an established brand and system, while
the franchisor expands its business without having to invest heavily in new locations.
Key Elements of Franchising:
• Franchisor: The company or individual that owns the brand and business model.
• Franchisee: The person or company that buys the rights to operate a business using the franchisor's
brand and system.
• Franchise Agreement: A legal contract that outlines the terms and conditions between the franchisor
and franchisee.
EXAMPLE I: MCDONALD’S
McDonald's is one of the most famous examples of franchising. It has expanded its global presence largely
through franchising, with thousands of restaurants worldwide. In this case, McDonald's (the franchisor)
licenses its name, menu, business operations, and marketing systems to franchisees.
• Franchisee Role: The franchisee invests in the setup and operation of a McDonald's restaurant,
adhering to the standards and processes set by the company.
• Franchisor Role: McDonald’s provides training, marketing support, product supply, and a tried-and-
tested business model to the franchisee.
• Franchisees pay an initial fee and ongoing royalties based on sales. In return, they benefit from
McDonald's established brand and operational systems, which are essential for running a successful fast-
food business.
EXAMPLE II: SUBWAY
Subway, another globally recognized franchise, operates in the fast-food industry, focusing on providing
customizable sandwiches and salads. Subway’s franchising model has allowed it to grow rapidly across
numerous countries.
• Franchisee Role: A franchisee opens and manages a Subway outlet, ensuring that the store follows the
Subway system for food preparation, customer service, and store operations.
• Franchisor Role: Subway provides franchisees with training in food preparation, operational
management, marketing, and customer service. The company also supplies ingredients and other
necessary products, maintaining brand consistency across locations.
• Subway’s franchising model is appealing because it allows franchisees to operate in a proven business
format, backed by the franchisor's support. Subway franchisees pay an initial investment fee and a royalty
percentage of sales.
Franchising is a mutually beneficial business arrangement. The franchisor can rapidly expand
its reach, while the franchisee gains access to an established brand and operational support.
Companies like McDonald’s and Subway demonstrate the success of the franchising model
by using it to grow their businesses globally. For the franchisee, it provides the advantage of
operating under a reputable brand with ongoing training, support, and a proven business
formula.
