User assumes all risk of use, damage, or injury. You agree that we have no liability for any damages. What is a Franchise? Research and development burden is lessened as it is transferred to the franchiser Less financial burden as most franchises offers financing options. Banks are also more willing to lend to well-known franchises. However, there are some disadvantages of franchising The franchising application process can be long and tedious, and the requirements for consideration can be very demanding.
Any difficulties faced by the franchiser are passed down to the franchisee. The franchisee is not an independent business but is controlled by the franchiser Fees associated with franchising such as royalties can be high The profit is split among the franchiser and the franchisee What does Chain mean?
Some of the advantages of operating chain stores are: The chains retain full ownership rights There is an economy in advertising as it is not necessary for each branch to advertise It is easy to identify an unprofitable branch, and either close it or move it to another location Chains retain all the profit, as there are no middlemen The cost of distribution is less as wholesalers are eliminated Uniformity in price Chains, however, have some disadvantages It may be difficult to exercise control over all the chains The chain business carries all the risk as there is no risks are passed to investors It is expensive to run chain stores Similarities between Franchise and Chain Both aim at profit maximization Both have a set of policies and procedures to be followed Differences between Franchise Vs.
Chain Ownership in Franchise Vs. Chain A franchise sells major business components such as actual products and services, business logo, and business model, whereby each franchise has a different owner. Risk sharing The business risk is shared between the franchiser and the franchisee while a chain assumes all the risks on its own.
Profit sharing in Franchise Vs. Chain While a franchise splits the profit between the franchiser and the franchisee, a chain retains all the profit made in the business. Business control A franchise does not have full control of the business and work hand in hand with the franchiser, a chain, on the other hand, has full control of the business. Business expenses in Franchise Vs. Chain The expenses in a franchise are shared between the franchiser and the franchisee whereby the franchiser carries most work involving the brand, such as marketing and advertising expenses.
Business Policies involved in Franchise Vs. Chain While business policies in a franchise such as responsibilities, procedures, and rights are set out by the franchiser to ensure consistency, a chain sets its own business rules and policies.
Franchise vs. Chain: Comparison Table Summary of Franchise vs. Chain A business person who would like to start or expand a business would have to choose between a franchise and a chain, based on factors such as spreading of risks, costs involved in starting a new business, full business ownership retention and means on how to expand a business.
Send a free enquiry to School is Easy for further information! Get expert franchising news delivered straight to your inbox. Please keep me up to date with regular emails from What Franchise. Search s of UK franchises and become your own boss today. UK Franchise Directory Not sure what you're after? The information you submit via our enquiry form is shared only with the franchise business es that you have selected.
By submitting the enquiry form you are consenting to send your personal information to the selected franchise business. You also agree to receive further newsletter email marketing from What Franchise. Home Business advice. Chain and franchise are terms that are sometimes used interchangeably when talking about big brands such as McDonald's or Costa, but the differences between the two are vast To put it simply, in a chain business, a parent company owns all of the business locations.
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Start your own Just Shutters Business franchise. Start your own School is Easy franchise. Companies to Consider. Anytime Fitness Seeking Entrepreneurs. In contrast, a franchise is a business model where one party grants another party the right to use its trademark or trade-name and certain business systems and processes.
Overview and Key Difference 2. What is a Chain 3. What is a Franchise 4. A chain is a business model where one parent company operates all individual locations. With this business concept, one organization handles all of the management for their entire business. Moreover, we sometimes call chain stores as retail chains.
We can notice some common features in chain stores. All locations in a chain store share a brand. Moreover, they have a central management, which is a management that manages all the stores. In addition, they use identical business concepts and practices. Furthermore, they share the same supply chains and training programmes for staff. Moreover, the chain stores can exist in one state or across the globe.
The existence of chain stores depends on the brand, nature of the products they sell and the popularity of the store.
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