History Of Franchising Essay

3.1 History of franchising
• Ancient franchising - It started in the middle ages. It was based on loyalty rather than franchising in terms of taxes. Kings used to grant the rights and mainly for peace-beeping.
• Early modern franchising – Albert singer considered to me the first modern franchising. He used to sell his products to large geographical areas. Baby boomers began to come in the age of 60s and it demand helps to increase the modern franchising.
• Franchising today – It is the most popular way for the people to run business, there are 760,000 franchised businesses and 13 million jobs.

 Based on sample representing more than 70 percent of all franchised units at the end of 2011, the number of franchised increased at a compound annual

4 IMPORTANCE OF LOGISTIC SYSTEM IN FRANCHISE

In logistics, the focus is on customer. When planning for the logistics function, firms consider the needs of the customer first. The customer’s goals become the logistics provider’s goals.
Hence, logistics is basically designing, managing and improving the movement of products through the supply chain. Clearly any one organization is unlikely to require all these specific tasks to be accomplished. (Refer figure 1.6)

4.1 Role of effective supply chain
A supply chain provides the means by which a company brings its products or services to the market. For a supply chain to be effective, all of the involved parties must be aligned to common goals and the company’s supply chain strategy. For the value of the supply chain to be maximized and cost savings realized, a company supply chain strategy must be executed efficiently. Many parts of the supply chain contribute to help the franchise system achieve quality goals. It can be achieved by offering uniform, high quality products and services to its customers.
Supply chain management includes:
1. Manufacturer
2. Supplies
3. Transporter
4. Warehouses
5. Retailers
6.

Some of them are, rapid response, it is concerned with a firm’s ability to satisfy customer service requirements. The objective is to reduce inventory deployment to the lowest level consistent with customer service goal. Lastly, transport also plays a very important role to achieve the objectives, it is related to the type of product, size of shipment and distance. Moreover, all these objectives plays a very important role to manage the business of franchising and to achieve its producers goal also customers satisfaction. (Refer figure 1.9)

5 Supply chain management of MC DONALS (India):
5.1 Introduction
 E-Procurement is the purchase and sale of supplies, work and services through online system.
 McDonald’s spent a few years setting up a unique cold chain. Cold chain is necessary to maintain the freshness of the products.
 E-Procurement is the purchase and sale of supplies, work and services through online system.
 McDonald’s took 4 years and around Rs 450 crores to set up the food supply chain even before opening its 1st restaurant.
 McD India has pioneered the cold chain management system.
 E-Procurement allows 85% cut in costs according to McDonald’s supply chief Edwards.

5.2 Types of suppliers

 Dynamix Diary Industries (supplier of