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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
Explain about the investment decision- financial management The investment decision relates to selection of assets in which funds would be invested by a firm. Assets which can
net current asset forecast method
The securing of the working capital needed for the support of raises in accounts receivable and inventory related with an organizations initial expansion time.
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