Expansion Through Franchising Case Study Example | Topics and Well Written Essays - 1250 words - 7

Expansion Through Franchising - Case Study Example With the expansion and maturity of the franchise, the chain management often buys them or became interested in opening own stores for themselves which help in gaining a better understanding and controlling of the operations. And with increasing control and understanding the franchising fees get supplemented by profits. Secondly, the decision to choose the town, the neighborhood and even which side of the street as the region of the location is an important key factor of success. A difference in the location of the store can make a huge difference between the success and the failure. Thus the importance of ‘scale economies’ is to be recognized at the store level because the fixed cost of the outlets are very high and so to meet the cost, the small returns per unit cell and the traffic volume is very crucial. Efficiency in store management is also an important factor of profitability within the industry. Since the opportunities of waste, inefficiency, and shrinkage are man y there is a requirement of an efficient management system. Thirdly the efficiency of the store managers in building relations with the local public, developing goodwill with the customers, maintenance of the morality of the employees and keeping an eye on the competing chains are important for ensuring the short-term profits. Fourthly with the development of the industry, a clear overall market image of the chain is very important. There is a need for maintaining consistency and reliability of the product line throughout the chain. Introducing more innovative recipes often becomes risky as it may deviate from the basic and core theme of the industry. (Bartlett and Rangan, 2) Dick Mayer emphasizes on Strategic planning. According to him strategic planning can bring effective changes in the way of marketing and brings accountability in the function. Every product and their pricing proposals require analysis and review by the management to evaluate their ability to meet long-term strategies. He focused mainly on the subsidiary in Japan as it was one of the fastest  growing units with the highest potentiality also a challenge for the entire international operations.