Question

subject: Basic entrepreneurship

Franchising is based on a marketing concept which can be adopted by an organization as a strategy for business expansion. Where implemented, a franchiser licenses its know-how, procedures, intellectual property, use of its business model, brand, and rights to sell its branded products and services to a franchisee. In return the franchisee pays certain fees and agrees to comply with certain obligations, typically set out in a Franchise Agreement. Discuss the following 1. 2. 3. History of franchising. Importance of franchising industry to the economics and social. Level of franchising development in Malaysia. Format: Font Font Size12 : Times New Roman Spacing Double No. of Pages Not exceed 5 page (exclude cover page and reference)

Answer 1

History

Franchising occurs across 80 nations and has seen groeth since 1920 era and has seen huge immense growth till 1999. Mcdonalds, PizzaHut, Burgerking with one of best innovative models of profit sharing. History also relates to Middle Ages where feudal lords sold rights of selling to individuals in pursue of profit . Off lately conversion Franchising is observed wherein independent businesses turn into franchise under umbrella of franchisors brand name.

Importance

Flexibility in independence, continous monetary support from franchisors, secured financial support, brand name support. This drives major players like Mcdonalds to have continued funding and establish value chain and lean management And price stability. However disadvantage of such model include restrictions and resistance to innovation if high cost involved and micromanagement .

Situations in Malaysia

Franchising is been great model here with royalty and advertising fee being low at 5%. Market is well established and has continued levels of engagement with franchise companies looking for support through trade events and seminars and exhibitions . Good deal of funding and relaxed capital control norms coupled with easier government regulations make Malaysia an attractive destination for franchise opportunities .