The decision to purchase a franchise had both, advantages and disadvantages. The Sonic franchise, while being “the 10th largest fast-food franchise”, can also be a substantial investment if one decides to purchase a traditional store, which ranges between “$1.1 and $3 million” (O. Ferrell, Hirt, & L. Ferrell, 2009, p. 169). That is quite a price tag, but I suppose gaining rights to the name, logo, design, products, advertising, as well as an already-secured loyal following, is worth it in the end. Of course, the company does offer a non-traditional store route for a cheaper investment. In addition to the initial investment, franchisees are responsible for paying Sonic “a franchise fee of $45,000 and 2 to 5 percent in ongoing royalty fees” (O. Ferrell, Hirt, & L. Ferrell, 2009, p. 169). Now consider these investment figures, and then double them, as the Sonic franchise requires its franchisees take on a minimum of two stores (O. Ferrell, Hirt, & L. Ferrell, 2009). It is apparent that cost can be a disadvantage for …show more content…
One must analyze the market and location, as well as the level of independence one is willing to give up. “Market saturation and poor location choice can increase the risk for failure” (O. Ferrell, Hirt, & L. Ferrell, 2009, p. 169). Moreover, a business owner who desires to make business decisions freely and be in total control, may find purchasing a franchise to be dissatisfying (O. Ferrell, Hirt, & L. Ferrell, 2009). Franchisees, while purchasing rights to the name, still must abide by the franchisor’s business model without modification. “Each franchise has their own style and management techniques, which are passed on to the franchisees” (Khan, 2005, p. 193). Furthermore, a Sonic franchise is not available for everyone, as they require excellent financial records and prior experience in the restaurant
1) For a channel to succeed four location decision factors are considered; economic conditions, competition, the strategic fit, and the cost of operations. Stores need ...
Moore, L 1997, The Flight to Franchising, US News & World Report. June 10, pp. 78-81.
o Pay $200,000 up front for development fees and franchise fees for the first five stores
Sonic is the largest drive-in chain in the United States. Under the slogan "America's Drive-In," a Sonic features fast service by roller-skating carhops and unique menu items that cannot be found at McDonalds, Burger King, or Wendys. Sonic restaurants operate in 27 states so it is smaller than leading fast food chains however it is still a significant competitor. Founded by Troy Smith and Charlie Pappe in 1953, Sonic went from a single root beer stand to a popular franchise. In 1973, Sonic restructured as a franchise company and later became Sonic Corporation. The company experienced financial decline due to the lack of consistency from its franchisees so they were bought out by Sonic Corporation and restructured. In 1995, Sonic introduced "Sonic 2000," an aggressive multi-layered strategy to further unify the company in terms of a consistent menu, brand identity, products, packaging, and service. The campaign was successful and Sonic's brand recognition increased. Strengths include a strong competitive nature, flexible strategies, and employee/franchisor relationships. Weaknesses include lack of communication and domestic expansion. Threats in the external environment include company size, employee turnover, weak economy, rivals in similar industries, overseas expansion, and slow growth markets. Sonic can overcome these threats with opportunities such as global expansion, increase in the number of quick service consumers, and appealing investment opportunities. Alternative strategies and recommendations suggest that Sonic should concentrate on a low cost strategy and focusing on niches such as the health food market.
The purpose of the following paper is to be able to inform the reader(s) of the paper about the business goals of the ownership and operations of a Sports Bar Franchise. The topics of discussion will include the description of the goal of the business and subtopics of the types of goods and services that are provided by any Sports Bar Franchise, what types of customers will this business attract, and lastly, how and where the specified services are made available. The paper will also include dialogue about the strengths and weaknesses of an assorted of business organizations and which one would be most appropriate for the author’s business venture.
According to Wheelen & Hunger (2010), Panera management believed that its specialty bakery-café concept had significant growth potential, which it hoped to realize through a combination of owned, franchised, and joint venture-operated stores. Franchising is a key component of the company’s growth strategy. p. 29-10. The 'Secondary' of the 'Secondary'. Demand for Panera franchising opportunities was very high, which allowed Panera to be picky about where and with whom they would do business.
This is a point that rings very true. Store development is important, but there are other key features that need to be considered for continued growth
As responsiveness increases, the convenience store chain is exposed to greater uncertainty. A convenience store chain can improve responsiveness to this uncertainty using one of the following strategies, especially for fresh and fast foods:
Founded in 1953, Sonic has become the largest drive-in chain in the nation. Sonic was founded by Troy Smith, Jr. in Shawnee, Oklahoma. His dream was to own his own business. Sonic Drive-In keeps the 1950s alive through its chain of drive-in restaurants, each complete with speaker-based ordering systems and carhop servers - some on roller skates. Sonics top competitors are McDonald’s, Burger King, and Wendy’s. McDonald’s is the leading competitor in the fast-food industry. McDonald’s has the most restaurants with 12,380 locations and has over 364,000 employees. Burger King has 11,350 outlets in 57 countries and territories worldwide. About 75% is located in the United States. Wendy’s is the third largest quick-service hamburger restaurant chain in the world, with more than 6,600 restaurants in North America and international markets.
Another strength is Burger King’s franchise development having 90% of its restaurants franchised. The franchise concept allowed the company to grow with minimal capital expenditure and receive royalties and fees. Burger King went above and beyond and created a new model of its restaurant to attract mo...
With researching my questions, I wanted to see what changes from the original content were made to better fit the changing demographic audiences. To do this, as a primary resource, I looked at the visual transition that took place from the original comic book to the cartoon tv and movie adaptions. I also researched through my secondary sources to try and understand the commercial motives behind these changes that make the Ninja Turtle franchise a success. I also wanted to better understand how the public, more specifically, the franchise's audience, have perceived it and how those perceptions might have changed along with it. As Marsha Kinder discusses in her book, Playing with Power in Movies, Television, and Video Games, the gravity of
Not having to answer to a corporate boss is the dream of many and the flexibility that owning a business franchise creates provides this option. Success is not reached by simply creating a business, however. The level of success is measured by the size and efficiency of the business. Business growth is the driving force of the economy. The additional jobs and revenues created when a business expands allow the economy to grow at exponential rates. One of the fastest and most popular ways to increase the size of a business is to turn it into a franchise, which can then be purchased by individuals. Franchising provides opportunities that are beneficial to both the parent company and the purchaser. The company that owns the business can expand without having to pay such a large initial cost to open a new store since the franchise purchaser pays a cost to open the business. As well, the company can regulate many of the business activities so that there is a sense of consistency throughout all of the locations. The purchaser is allowed to use the trademarks and goods of the franchise which already have a large market presence. As well, they are provided with training and work standards by the company to help their business run smoothly (Kalnins & Lafontaine, 2004, p.761). Looking at the business model of the world’s largest food retailer, McDonald’s, provides great insight into franchising and business growth in general as well a better understanding of a global business that utilizes the franchising technique.
By choosing to expand into markets later than other fast food restaurants Burger King hopes to avoid the problems of developing infrastructure and establishing a market base. For instance, by following McDonalds into Brazil, Burger King avoided the need to develop the infrastructure and mark...
The first step in any business is to think of or create a business idea. Without an idea, one cannot launch their business off the ground. A right direction is needed to create a business with a unique idea. However, other options include franchising or buying an existing business (1). Franchising allows an individual to run stores such as Burger King or McDonalds under the corporate name. It involves taking training classes and a heap of money in order to start a franchise. A Franchisee will have to buy products and services from the corporate entity they are franchising from, which is often required. Buying a franchise is like taking a piece of the pie from the company that is franchising and sharing that pie with everybody else. In addition having a franchise allows one to communicate and in essence become a big part of an added business opportunity (4). Franchising is far from easy to start and maintain for that matter. Starting a franchise involves a l...
A franchise is simply investing money in a location or store, and then having the store become your own business after learning how to manage the entire business. You earn the majority of the profits, and you also don't have to worry about operations. You'll be taught by the company on how it run the entire business, and this is the reason why this is a huge and very easy way to become rich. Franchises require quite a hefty investment depending on the business you plan to buy. However, if the business is in high demand, there is profits to be made. Take for exMple the Cold Stone Creamery business. Countless people purchase one of their many franchises. The money is very good, the opportunities are endless, and the fact that there is no more need for advertising is what makes this more worth the investment in the long