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Presenting
Franchising
Foreign
Direct Investment
Licensing
Franchise
A franchise operation is a contractual relationship
between the franchisor and franchisee in which the
franchisor offers or is obliged to maintain a
permanent interest in the business of the franchisee
in such areas as know-how and training; wherein the
franchisee operates under a common trade name,
format and/or procedure owned or controlled by the
franchisor, and in which the franchisee has or will
make a substantial capital investment in his business
from his own resources.
- Definition by International Franchise Association
Types of Franchises
Product distribution
franchises
Business format
franchising
outlet in
Sale, Australia
outlet in
Marseille, France
Management franchise
Management Franchises
It can be :
Establishing a wholly owned subsidiary or
company.
Acquiring share in an associated company.
Though a merger or an acquisition of a
company.
Through an equity joint venture with a
company or investor.
Example
Types of FDI
Three types of FDI:
Horizontal FDI: Doing the same business in abroad.
Vertical FDI: Different stages of business are added in
abroad.
Conglomerate FDI: Unrelated business is added in abroad.
Example:
Advantages of FDI
Economic growth
Create employment
Improved product standard
Access to global market
Disadvantages of FDI
Licensing
Examples
Examples
Advantages
Things to consider