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Franchise (licensing)
- Granting or licensing of the right to use systems, expertise,brandsknow how etc. to another organisation, generally in return for a profit share or sales royalty for example authorisation to sell a company's services or goods in a particular geographical place.One of the most famous illustrations is McDonalds with more franchised restaurants than any other franchise network.
- Rapid market expansion for franchisor.
- Expansion generally financed at least in part by the franchisee.
- Entrepreneurial spirit of franchisee for example better than perhaps a bureaucracy of using internal staff to expand organisation instead.
- Economies of scale achieved for instance management and overhead spread over more and more franchises as the organisation grows in size.
- Long-term loss of profit for franchisor
- Control over franchiser reputation can be costly to support
State the Types of integration Types of integration Horizontal Target company has same operations, and is in the same industry
#question.economic and finanancial environment.
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Significance of cost of capital
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The consolidated income statement for AB Group for the year ended 30 June 2010: (all amounts in the workings are in $000, unless stated otherwise)
Partial Income Statement Year Ending 2011 Sales Revenue $350,000 COGS $140,000 Fixed Costs $ 43,000 SG&A E
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