1

A Successful Business Model.

Many are interested in Malaysia.

A successful chain could be created if you

have the ability, cash and the willingness to
adhere to the laws of franchising of the
country.

2
 PIZZA HUT
KENTUCKY CHICKEN
McDONALDS
DOMINOS
SWENSONS
MARY BROWN
BIG APPLE
7-Eleven Inc.
Subway

3
 PELITA ( Mamak Chain)
OLD TOWN COFFEE SHOP
LA MANILA
SECRET RECIPE

4
 Franchising is the practice of using another
firm s successful business model.
Meaning building chain stores to distribute
goods and avoid investment and liability.

Franchisor is the offeror.

Franchisee is the offeree.

The franchisors success is the success of the

franchisee.

5
 A good track record of profitability.
Easily duplicated.
Detailed systems, process, and procedures.
Around a unique or unusual concept.
Broad geographic appeal.
Relatively easy to operate.
Relatively inexpensive to operate.

6
 Franchising offers the franchisees the
advantage of starting up quickly based on a
proven trademark and the tooling and the
infrastructure as opposed to developing
them.
Franchising is a business model used in more
than 70 industries that generates more than
$1 trillion in US sales annually.

7
 Two important Payments to the Franchisor

a) a royalty for the trademark

b)reimbursements for the training and

advisory services given to the franchisee and
the team.-these two fees are combined and
called management fees.
A disclosure fee is separate and is always a
front-end fee.

8
 A franchise usually lasts for a fixed period
time( which requires renewal) and serves a
specific territory or area surrounding its
location.
One franchisee can manage several locations.
Agreements normally lasts from five to thirty
years, with premature cancellations or
terminations of these contracts would lead to
serious consequences for the franchisees.-
breach of the contract-remedies or damages.

9
 A franchise is merely a temporary business
investment.

It involves renting or leasing an opportunity

and not buying a business for the purpose of
ownership.

10
 This document lists out the franchisor
revenues and profits, no law requires to
estimates of franchisee profitability.
It all depends on how intensively the
franchisee works on the franchise.
Various tangibles and intangibles such as
national or international advertising, training
and other support services are made available
by the franchisor.

11
 Franchise brokers help franchisors to find
appropriate franchisees.
They are also the main master franchisor who
obtain the rights to sub-franchise in a
territory.
According to International Franchise
Association about 4% of all businesses in the
US are franchisee-worked.

12
 It is venture investment capital without the
need to give up control of the operation of
the chain and build a distribution system of
services.
After the brand and formula are carefully
designed and properly executed, franchisors
are able to sell the franchises and expand
across the country and continents.
The business uses the capital and resources
of the franchisee with reduced risk.

13
 Franchisor rules imposed by the franchising
authority are very strict and important in the
US and most of the countries.-need to study
them and help the small or start-up
franchisees and also to protect them.
Besides the trademark, there are proprietary
service marks which may be copyright and
corresponding regulations.

14
 Each party to a franchise has several interests to
protect. The franchisor is most involved in
securing protection for their trademark,
controlling the business concept and securing
their know-how.
There is a great deal of standardization
proposed. Logo, signs and trademark should be
standardized.
Staff Uniform shade and colors should adhere
to the regulations. The service has to be in
accordance to the pattern followed by the
franchisor. Hence the franchisee is not in full
control of the business as they would be in
retailing.

15
 A service can be successful by buying
equipment and supplies from the franchisor
or those recommended by the franchisor for
it might not be over-priced. Coffee Brew ,it
is identified as a trademark for it comes from
a particular supplier.

16
 The franchisee must carefully negotiate the
license.
Both should develop a marketing plan or
business plan.
The fees must be fully disclosed and there must
be no hidden fees.
The start-up, costs and working capital must be
known before taking the license.
The franchisee is an independent merchant. He
must be protected from any trademark
infringement by third-parties. The franchisee is
required to be assisted by a franchise attorney
during the negotiations.

17
 The training period the costs is covered by
the initial fees.-to operate complicated
equipment and manuals should be provided.
Many franchisors have set up corporate
universities to train the staff on-line. In
addition literature and sales documents
should be easily available by e-mail.

18
 The agreements carry no guarantees or
warranties. These contracts tend to be
unilateral, always in favor of the franchisor-
protected from any lawsuits from the
franchisees.
They ought to know of the risk involved in
the franchise and the franchisor does not
promise success or profits if the business
fails.

19
 They are renewable at their sole option. Most
franchisor make the franchisee sign
agreements waiving their rights under federal
and state laws.

In some cases allowing the franchisor to

choose where and what law to be applied for
an arising dispute.

20