- Tip 3-1 Risk Management: Ownership and Wealth
- Franchise Risk Profile Template: An Introduction
- Agency Problems and Administrative Efficiency
- Buy a franchise, or launch a standalone?
- How Do Franchisors Determine the Amount of Franchisee Fees and Royalties?
- Size and Risk Management
- Balancing Company and Franchised Outlets
- Resource Constraints
- Franchise Disclosure: An Insight into Individual Franchisor Health and Wealth
- License Agreement: How the Franchise Shares Responsibilities and Wealth
- Key Factors in the Franchise Relationship
- Public Capitalization: An Expanded View of the Franchise Company
The sheer size of franchising in terms of number of stores, revenue generated in the United States, and its significant portion of the U.S. GDP is evidence enough of its success. Franchising accounts for more than a third of the annual retail sales in the United States; clearly, it is a successful wealth-creating vehicle. The capital marketplace would simply not support this pathway to entrepreneurship if return on investment did not warrant it. This chapter is the first clear documentation of both franchisee and franchisor wealth creation. The debate is advanced in favor of our argument that franchising, for all the stakeholders, is entrepreneurial in nature and fact.
Although the potential for wealth creation is clear, the road to success is fraught with details that can derail great opportunities. Here, we’ve provided substantial evidence that franchising as an entrepreneurial alliance can fulfill the promise of wealth creation. By examining the major components of the SDS in later chapters, we also show how the combination of these components can create sustainable competitive advantages for the franchise company.