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    Case Study

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    Cristy Lou Licong
    Fred had extensive experience in the automotive industry but lacked direct experience running a car repair business. While Fred's qualifications made him capable of being a franchisee, he misunderstood what it meant to be a franchisee. It is common for new franchisees to believe they will own the business and be their own boss, but in reality they are investing in someone else's brand and system. Fred could have done more research to understand the differences between starting his own business versus being a franchisee. The document advises Fred that as a franchisee for five years, he has gained experience and success, so he should continue focusing on running the franchise profitably.

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    Case Study

    Uploaded by

    Cristy Lou Licong
    123 views2 pages
    Fred had extensive experience in the automotive industry but lacked direct experience running a car repair business. While Fred's qualifications made him capable of being a franchisee, he misunderstood what it meant to be a franchisee. It is common for new franchisees to believe they will own the business and be their own boss, but in reality they are investing in someone else's brand and system. Fred could have done more research to understand the differences between starting his own business versus being a franchisee. The document advises Fred that as a franchisee for five years, he has gained experience and success, so he should continue focusing on running the franchise profitably.

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    CASE STUDY

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    Fred had extensive experience in the automotive industry but lacked direct experience running a car repair business. While Fred's qualifications made him capable of being a franchisee, he misunderstood what it meant to be a franchisee. It is common for new franchisees to believe they will own the business and be their own boss, but in reality they are investing in someone else's brand and system. Fred could have done more research to understand the differences between starting his own business versus being a franchisee. The document advises Fred that as a franchisee for five years, he has gained experience and success, so he should continue focusing on running the franchise profitably.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    123 views2 pages

    Case Study

    Uploaded by

    Cristy Lou Licong
    Fred had extensive experience in the automotive industry but lacked direct experience running a car repair business. While Fred's qualifications made him capable of being a franchisee, he misunderstood what it meant to be a franchisee. It is common for new franchisees to believe they will own the business and be their own boss, but in reality they are investing in someone else's brand and system. Fred could have done more research to understand the differences between starting his own business versus being a franchisee. The document advises Fred that as a franchisee for five years, he has gained experience and success, so he should continue focusing on running the franchise profitably.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 2

    CRISTY LOU LICONG BSBA3B

    ELECT 4 – Ms. Dian Olango

    “THOUGHT IT WAS SAFER THAN STARTING HIS OWN BUSINESS” (a case study)

    1. Assess Fred’s capability and capacity to be a franchisee in general and for this specific
    company.

     In Fred's case, he may be considered totally capable and qualified to be a car repair
    franchisee due to his previous employment in the automobile components sector for about
    30 years. First, the business is in the same industry where Fred worked for a long time.
    Second, having retired as a top executive from the prior organization, Fred is highly skilled
    in terms of owning the information, abilities, and skills required to operate a franchise within
    the same industry. However, there is a difference between the exact service given by the
    prior firm he worked for (automotive components) and that of his franchise (car repair). As a
    result, in terms of having direct and prior experience operating a car repair business, Fred
    appeared to begin as a beginner in this type of business venture.

    2. Evaluate Fred’s misconceptions about being a franchisee. Speculate how common these
    misconceptions may be for all new franchisees.

     There are many misunderstandings regarding franchising, but one of the most common
    is that you, as a franchisee, own the business. On truth, you are investing your resources in
    a system in order to benefit from the brand name, operating system, and ongoing support.
    The brand name and operating system are licensed to you and everyone else in the
    system. This statement so validates Fred's opinion that one of the misconceptions about
    franchising is that when one goes into a franchising agreement; the franchisee becomes his
    own boss and runs his own business. As a franchisee, you must follow and adhere to all of
    the franchisor's terms. Similarly, it was emphasized that as a franchisee, you own the
    company's asset, in which you have chosen to invest in someone else's brand, operating
    system, and ongoing support. You control your company's assets, but you are licensed to
    operate someone else's business system. It is therefore common for new franchisees to
    believe that by entering into a franchise agreement, the new venture will provide them with
    the opportunity to own a business and be their own boss – because they will invest a
    significant amount of money, which is comparable to investing in establishing a viable new
    business venture. The main difference in franchising is that one chose to invest in a
    previously established historical performance to evaluate the customer's response to the
    product (or service) and thus provide a plus factor in terms of image core competency and
    competitive advantage.

    3. Suggest what Fred could have done differently to be better informed and advise Fred on action
    he can or should take knowing his situation.

     To be better informed, prospective entrepreneurs considering starting a new business


    venture or entering into a franchise agreement must conduct more complete and
    exhaustive study on the alternative course of action to establish a new business venture or
    enter into a franchising arrangement. The following advantages should have been noted
    and made clear to potential franchisees when seriously considering the option of going
    through a franchising agreement: Ownership mentality, building the value of the brand, and
    franchise system generally have a superior image over other distribution approaches. The
    decision may be influenced by his priorities, personal ambitions for the future, and the
    terms of the franchising agreement. Since Fred first stated that his personal and
    professional ambition was to pursue semi-retirement and spend the remainder of his years
    there running a business. He should be reminded that by franchising, he is already
    accomplishing his goal. He should also be reminded that after five years of franchising, his
    experience and aptitude have improved, as evidenced by the number of branches that
    have been opened profitably as a result of the financial success of this enterprise. This
    indicates that he has been industrious and financially successful in running the firm.

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