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RESTRUCTURING AND FRANCHISING

RESTRUCTURING AND FRANCHISING. Content. corporate alliances and acquisitions; franchising. Why companies need. alliances, acquisitions, franchising. ?. To stay competitive on the market. An alliance can be achieved in a number of ways:. Joint venture. Merger. Acquisition.

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RESTRUCTURING AND FRANCHISING

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  1. RESTRUCTURING ANDFRANCHISING

  2. Content • corporate alliances and acquisitions; • franchising.

  3. Whycompaniesneed • alliances, • acquisitions, • franchising ? To stay competitive on the market

  4. An alliance can be achieved in a number of ways: Joint venture Merger Acquisition

  5. How alliances help companies to strengthen their position on the market • companies acquire a bigger market share; • companies increase their capital and budget on different • purposes; • companies use the best of each other’s management • and labour force; • companies use the best of each other premises, equipment, • technologies, procedures; • companies don’t spend extra money to acquire more • customers – they receive another company’s customer • base.

  6. Whyalliancesfail • companies are afraid that a voluntary joint venture • or merger will turn into a forced takeover;

  7. Why alliances fail • companies don’t want to lose their identity and • corporate style, as a result they may lose • their loyal customers;

  8. Why alliances fail • when the negotiations about an alliance have started, • companies learn more details about each other • and come to the conclusion that an alliance will be • no good for their business and financial position;

  9. Why alliances fail • there can arise difficulties to agree • on costs and prices;

  10. Why alliances fail • companies don’t agree to reduce their staff or • change work conditions;

  11. Why alliances fail • both the personnel and shareholders may feel • lack of trust in management personalities;

  12. Why alliances fail • companies can’t agree • which company representative • will become the CEO.

  13. How a franchisingcompanyworks • Franchise fee (front end fee); • Royalty (management service fee); • Advertising fee Franchisor (franchiser) Franchisee • Operations manual; • Master franchisee

  14. What an operations manual contains • corporate style and corporate culture; • a code of practice where the franchisor sets the standards • customer care; • a list of preferred suppliers; • the fixed range of goods and services that should be • provided by the franchisee; • dress code for employees; • a list of documents that the franchisor demands • to carry out the supervision.

  15. Advantages of franchising FOR FRANCHISER • selling a franchise allows them to expand their business and cover • a bigger territory with their products or services without investing money. FOR FRANCHISEE • a franchisee doesn’t need to spend money on promoting a company • and making it known to the public; • investing in business that is already established on the market implies • less risk; • franchisee doesn’t need to think over business procedures, structures, • schemes, rules; • a franchisee can always get quick advice from the franchisor when • facing some difficulties.

  16. Disadvantages of franchising FOR FRANCHISER • the franchisor risks the reputation of the company in case • the franchisee does something incorrectly and breaks • the established rules. FOR FRANCHISEE • a franchisee has almost no room for creativity, in order • to follow established rules and procedures carefully; • a franchisee is always under tight control.

  17. Basic glossary

  18. ThankyoUforyourattention

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