The franchisor giving certain rights to the franchisee within a certain period of time
A business method that involves the licensing of trademarks and methods of doing business
Usually chain stores
Franchisor:› Plan location and decoration of the
franchisee’s shop› Provide training› Give continuous guidance and assistance
to franchisee Franchisee:
› Pay entrance fees› Pay certain percentage of sales revenue as
franchisee fees
7-Eleven Starbucks KFC Burger King Pizza Hut GONG CHA Happy Lemon
Entrance Fee : 450,000 – 550,000› Include a returnable stock deposit of 200,000
Operating period given: 5 years Venue: Franchisee can select from the
existing 7-11stores, except the newly opened stores
Rent: pay by franchisor Franchisee need to attend a
60-days training course (for free)
Entrance Fee : › Returnable stock deposit : $30,000› Purchase of Equipment : $120,000 ~ $130,000› Decoration Fee : $150,000 ~ $200,000› FEHD License Fee : $20,000› Stock Purchase : $120,000 ~ 150,000
Operating period given: 3 years› From the 4th year, contract need to be renewed
per 2 years for $40,000
Consultant› Consultancy fee : $2,000 each time› Commissioner need to come at least 1 time/month
during the first six months
Franchise to one company ONLY› Starbucks Maxim’s› KFC (HK) Birdland (Hong Kong) Limited› Burger King SSPHK (Airport and The Peak)› NAS Holdings (Others)› Pizza Hut Jardines Group
This kind of franchisees can franchise to
others
Expand regionally, nationally and internationally
No need to take care of daily operations of the branches
Can concentrate on the development of the whole business
Franchisee can find out new areas of business
Earn the entrance fees and regular franchisee fees
Block the chance of loss
No need to spend long period of time to build the company’s reputation
Burden is less than independently setting up a new business
Obtains support from the head office Can learn the way to run a business Ensure there is not other competing
franchise business around
Franchisee can become a competitor Franchisee may hurt the reputation of
the head office
Have to follow the requirements of the franchisor
Lack of self determination or scope of creativity
The franchisee cannot take all the profits
Have to pay a certain percentage of sales revenue as franchise fees
Textbook Wikipedia (English / Simple English)
› en.wikipedia.org / simple.wikipedia.org
7-11› http://www.7-eleven.com.hk
GONG CHA› http://www.gong-cha.com
Online Forum› http://forum.online.hk/viewthread.php?
tid=966&extra=page%3D1&ordertype=1