Question

Discuss franchising as a new venture creation option; provide examples to support statements

Answer 1

It shall be noted that the dictionary meaning of "venture creation" is a process that helps a business idea takes the shape of full-fledged business that is oriented to be profitable and attracting investors.

On the other hand, the dictionary meaning of "franchising" is the activity of selling the right to operate on one's own business model for specified time-period and in a specific geographical location, for a price.

Thus, clubbing both the concept of "venture creation" and "franchising" , indicate that franchising is an economic activity that results in creation of value and is observed as one of the various possible ways in which a new venture can be created.

For example, Mc Donald's opens its outlets across different regions through franchising. The one who buys this franchise gets the right to use the logo, the brand, the classic business format of Mc Donald for a price. In turn, the management of Mc Donalds provides assistance with respect to setting-up of the shop, the kitchen and training & grooming of the employees and other time to time support & supports that helps running of the outlet successfully.

With the backing of the brand, the new venture draws the attention of investors.

Similarly, PASCO automobiles franchise helps the buyers to execute the right to use the brand in delivering the car-maintenance & garage services.

Thus, with franchising, a new venture can be created and is often observed as most viable option to do so in today's age of competition where the market are primarily driven by brand-values.