Bondar, I.

Horodashyn, V.

Mel’nikova, I.

Yelizarov, I.

English

eLibrary National Mining University

16It may be noted that the publicity - as a form of mass communication aimed atachieving popularity of a company, a person, an event etc. through the media – is animportant element of the marketing activities of any modern company seekingdevelopment.Bondar I., Yelizarov I., Horodashyn V.Mel’nikova I., research supervisorKryvyi Rih National UniversityFRANCHISING – A COMBINATION OF "BIG" AND "SMALL"BUSINESSKey words: franchising, businessFranchising - is a business organization under which the company (franchisor)passes a particular person or company (franchisee) the right to sell products andservices of the company. Franchisee agrees to sell the product or service on pre-defined laws and regulations of doing business, establishing the franchisor. Inexchange for the implementation of these rules franchisee obtains permission to usethe name of the company, its reputation (goodwill), product and services, marketing,technology, expertise and support mechanisms. To obtain such rights, the franchiseemakes an initial contribution to the franchisor and then pays a monthly premium.This kind of lease, because franchisees never becomes full owner of the trade mark,but only the right to use the trademark on the period of payment of monthlypremiums. Being subject of discussion, the amounts of these contributions negotiateda franchise agreement. Franchise package (complete system of business transferred tofranchisees) allows the corresponding businessman to run their business successfullyeven without previous experience, knowledge or training in this area.Opening its business on the franchise system – a multiple reduction ofinvestment risks by using well-known brand and repeatedly tested and well-established technology business. And the money, that the businessman pays for theright to use the brand and technology, by orders of magnitude less than the amountrequired for the creation and development of business "from scratch".And if we consider the main advantages of this form of business, we candistinguish the following examples:1) Raising capital;2) Speed of development;3) Labour Resource;4) Ease of Management/The disadvantages of franchising system are:1) Every man for himself;2) Planning Incorrectness;3) Quality control/In this way, we can say that the franchise – a combination of "big" and "small"business. This connection was called union, which on one hand is the energy and17commitment individual entrepreneur; on the other hand the resources, commercialpower and vast experience of large companies. By combining all this factors, we getthe power, responsibility, strength, resources and expertise.Bondar I., Yelizarov I., Karban V.Mel’nikova I., research supervisorKryvyi Rih National UniversitySUCCESS FACTORS OF FRANCHISING COMPANIESKey words: franchising, business, franchising companiesOne of the most successful tools in business today is franchising. Its applicationincludes assignment of rights to use a trademark to a standalone company or to salebranded products to other companies.The transmission of the right to use a well-known brand name is a source ofconsiderable income. Franchising also helps promote the brand in undevelopedmarkets.Acts on behalf of a well-known company enables franchisees to avoid extraexpenses on advertising and providing information about their products, as theproducts they sell are widely known. Practice shows that small and mediumbusinesses that develop through franchising, is consistently profitable and they arecompetitive for a longer time and retain their positions better than newly set-ups.The largest franchise companies of 2016 were McDonald's, SUBWAY®, KFC,Burger King, Pizza Hut. Franchise companies were assessed on the basis of thefollowing indicators: the number of granted franchises, franchise revenue,sustainability and growth, the length of activities and market expansion period.Due to their successful marketing policy, companies engaged in franchising, areconstantly expanding their activities and receiving significant revenue. This isachieved through several franchising benefits including increase of the number oftrade missions, reduction of their maintaining costs, the company’s popularitygrowth. Franchising activities provide opportunities to get round antitrust laws indifferent countries, as some powerful companies can take a significant market share.Creation of franchise companies on new territories reduce business risks for thefranchisor associated with a new market, as the business owner is a different person,better adapted to these conditions.Thus, it can be concluded, that franchising is the best choice for a newentrepreneur to succeed in their business. And for big companies franchising is one ofthe best methods to refresh and expand economic activity.

FRANCHISING – A COMBINATION OF "BIG" AND "SMALL" BUSINESS

http://ir.nmu.org.ua//bitstream/123456789/149285/1/BondarIYelizarovIHorodashynV.pdf

FRANCHISING – A COMBINATION OF "BIG" AND "SMALL" BUSINESS

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