Franchising: the down side

Article Abstract:

Franchising in Great Britain has been growing at a 20 percent annual rate, but euphoria over franchise-based business opportunities should be tempered by awareness of potential dangers to both franchisors and franchisees. New franchisors face increased marketing responsibilities. In addition to the marketing of a range of products and services, business opportunities must be marketed as well. Franchise businesses require significant amounts of extra capital, but franchisors should take care to qualify franchisees on criteria other than simple availability of cash, however. One of the main problems in the franchise industry is a lack of control over franchised operations. Planning and reviewing should be made an on-going part of franchise operation management. Properly qualified franchise consultants are needed to set up a suitable franchise practice code and to educate potential franchisors.

Management, Business consultants, Management consultants

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Business expansion through franchising

Article Abstract:

The advantages and disadvantages of franchising agreements as means for business expansion are discussed form the perspective of the franchisor. Advantages to franchising arrangements include: (1) the economic burden of the agreement rests with the franchisee, (2) franchisees are generally more success-motivated than employees, (3) franchisees allow franchisors relatively rapid entrance into a local community, and (4) franchising reduces fixed costs related to administrative expenses. Also discussed are: how to set up a franchise, accounting for franchise income, what services should be provided by franchisors to franchisees, preparing the franchising agreement, and methods for choosing franchisees.

Methods, Analysis, Industrial development, Industrialization

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Sheltering under the BES umbrella

Article Abstract:

Among the objectives of Great Britain's 1983 Finance Act were to stimulate the growth of small, high-risk companies by giving tax advantages to investors. The five-year maturity of the business expansion scheme (BES) is nearly over, and only about one-third of the venture companies are thriving. It is felt that rather than a shortage of venture capital, the main problem has been a shortage of suitable companies to fund. The chief concern from the investor's point of view is not making money, but taking advantage of tax benefits. There is no doubt that the BES has been instrumental in priming many small businesses with needed cash.

Taxation, Investments, Small business, Venture capital companies, Entrepreneurship, Tax incentives

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