How Franchising to Improve Companies' Performance on Both Sides of Franchise and Franchising Position

Appendix

Appendix A _____________________________________________________1

Appendix B _____________________________________________________2

Appendix C ______________________________________________________3

Appendix D______________________________________________________5

Appendix A

1.1 Less Costs and Higher Returns for Franchisors

Franchising is a popular method of business expansion today, since the franchiser is expanding his business without having to spread their resources across too many business units. What the franchisor needs to do is only to spend money on recruiting the franchisee, training and the required assistance before the opening of the franchise. (Usha,2010)

Franchising creates another source of income for the franchisor, through payment of franchise fees, royalty & levies in addition to the possibility of sourcing private label products to franchisees. This capital injection provides an improved cash flow, a higher return on investment and higher profits. (FranExcel, 2012)

1.2 Application

1.2.1 For example, if the Botak favourite’s main outlet in Singapore did not make much profit and its growth is stagnant, Botak could adopt the method of franchising which would help the company to earn an increase in revenue from the franchises, to try to expand and do well financially. Since the returns on business through franchising is very high as previously mentioned, the higher return on investment and profits would allow Botak to recover financially and gain a growth in the business. Even though Botak may have to spend some investment in research to improve the business, in the end, Botak would be able to earn enough profit to cover the costs and to keep the business growing.

1.2.2 For example, one of the budget hotels in Singapore, Value Hotel, is experiencing low customer turnover and activity, this hotel could take advantage of franchising and use franchising to publicise the name and highlights of the hotel. When franchisees...