Difference Between Chain and Franchise
文章推薦指數： 80 %
The key difference between chain and franchise is that chain has a single owner operating all the business locations, whereas franchise has ... Home/Business/DifferenceBetweenChainandFranchise Thekeydifferencebetweenchainandfranchiseisthatchainhasasingleowneroperatingallthebusinesslocations,whereasfranchisehasseparateowners,operatinginindividuallocations. Chainandfranchisearetwocontrastingbusinessmodels,whichareequallyimportantinthemodernworld.Achainisagroupofstoresownedbyonecompany,butspreadnationwideorworldwide.Incontrast,afranchiseisabusinessmodelwhereonepartygrantsanotherpartytherighttouseitstrademarkortrade-nameandcertainbusinesssystemsandprocesses. CONTENTS 1.OverviewandKeyDifference 2.Whatisa Chain 3.Whatisa Franchise 4.SidebySideComparison–ChainvsFranchiseinTabularForm 5.Summary WhatisaChain? Achainisabusinessmodelwhereoneparentcompanyoperatesallindividuallocations.Withthisbusinessconcept,oneorganizationhandlesallofthemanagementfortheirentirebusiness. Ingeneralabbreviation,theterm“chain”referstoanybusinesswithahandfuloflocations.Forexample,apersonwouldnotrefertoabusinessasachainifithasone,twoorthreebusinesslocations,butbythefourthstore,peoplewoulddefinitelyrefertotheentirebusinessas“chain”.Moreover,wesometimescallchainstoresasretailchains. Figure01:WalmartisanExampleofaChain Wecannoticesomecommonfeaturesinchainstores.Alllocationsinachainstoreshareabrand.Moreover,theyhaveacentralmanagement,whichisamanagementthatmanagesallthestores.Inaddition,theyuseidenticalbusinessconceptsandpractices.Furthermore,theysharethesamesupplychainsandtrainingprogrammesforstaff. Moreover,thechainstorescanexistinonestateoracrosstheglobe.Theexistenceofchainstoresdependsonthebrand,natureoftheproductstheysellandthepopularityofthestore.Thereareavarietyofchainstoresincludingrestaurants,supermarkets,specialityshops,etc.Walmart,Target,Macy’s,TheHomeDepot,TheBodyshop,WaffleHouse,andCostcoaresomeexamplesofworld-renownedchainstores. WhatisaFranchise? Afranchiseisabusinessmodelwhereonebrandisoperatedbyseparateentrepreneursindifferentlocations.Inotherwords,franchisereferstoabusinessmodelinwhichindividualspaytolicensethebrandorintellectualpropertyofanotherbusiness. Franchisebusinessesinvolveafranchiserandafranchisee.Thefranchisoristheonewhoestablishesthetradenameortrademarkofthebrand.Theotherparty,franchisee,istheonewhopaystheinitialfeetoconductthebusinessunderthefranchisor’sbrandnameandthesystem.Mainly,thefranchiseeistheoperatorofthebusinessinhisorherspecificlocationbypayingthefeesandroyaltiestothefranchisoroveranagreedtimeperiod. Moreover,thelegalagreementbetweenthetwopartiesisthe‘’franchise”;however,often,peopleusethistermtorefertotheactualbusinessoperatedbythefranchisee. Figure02:McDonald’sisanExampleofaFranchise BrandvalueisthemostimportantfactorinFranchisebusiness.Incertaininstances,franchisorsprovideallthenecessarysupportforthebusiness.Asexamples,thefranchisorprovidessystems,tools,brandstandards,andtrainingforstafftoupliftthecustomersatisfactionandensurethegoodwillofthebusiness. McDonald’s,SUBWAY,MariottInternational,KFC,andBaskinRobbinsaresomeofthepopularfranchisebrandsintheworld. WhatistheDifferenceBetweenChainandFranchise? Ownershipisthekeydifferenceinchainandfranchise.Franchisestoresalwayshavedifferentowners,whereaschainstoreshaveasingleownerforallbusinesslocations.Intermsofrisksharing,achainacceptsallrisksonitsown,whileinfranchise,thefranchiserandfranchiseesharetherisk.Profitsharingisanothersignificantdifferenceinchainandfranchise.Inachainbusinessmodel,theownergainsalltheprofit,whileinafranchise,thefranchisorandfranchiseesharetheprofitamongthemundertheagreedtermsandconditions. Moreover,achainhasthefullcontrolofitsbusiness,butafranchisedoesnothavethefullcontrolofthebusiness.Furthermore,thisisthesameinbusinessexpensesaswell;achainbearsallthebusinessexpenseswhile,inafranchise,alltheexpensesaresharedbetweenfranchisorandfranchisee.So,thisisalsoanotabledifferencebetweenchainandfranchise. Besides,intermsofbusinesspolicies,achainhasitsownproceduresandrulesforallbusinesslocationswhereas,inafranchise,allpoliciesarenormallysetupbythefranchisorandagreeduponbythebusiness.However,thismayvaryfromstoretostore. Summary-ChainVsFranchise ChainandFranchisearetwobusinessmodels.Insummarizingthekeydifferencebetweenchainandfranchise,thechainisoperatedbythecentralmanagementsystem,whereasthefranchiseisoperatedbydifferententrepreneurs.Moreimportantly,thefranchisestoresmainlytargettheconsumerswhoaremorebrandoriented,whilechainstores,mainly,aimthecustomerconvenience. Reference: 1.“Franchising.”BusinessDictionary,Availablehere. ImageCourtesy: 1.“Walmart”By MikeMozart (CCBY2.0)viaFlickr 2.“McDonald’slogo” ByMcDonaldsinc–CreatedbyconvertingtheEncapsulatedPostScriptfileavailableatBrandsoftheWorld(PublicDomain)viaCommonsWikimedia Relatedposts: DifferenceBetweenMScandMEng DifferenceBetweenCommerceandBusiness DifferenceBetweenFranchisorandFranchisee DifferenceBetweenCartelandCollusion DifferenceBetweenSocialEnterpriseandSocialEntrepreneurship AbouttheAuthor:PiyuPiyuholdsaPostgraduatedegreeinChemistryandanMBAwithknowledgeandexperienceinCompliance&RegulatoryAffairs,QualityAssurance,AuditingandR&D LeaveaReplyCancelreply Youremailaddresswillnotbepublished.Requiredfieldsaremarked*CommentName* Email* Website FeaturedPosts YouMayLike LatestPosts WhatistheDifferenceBetweenEngagementandMarriage WhatistheDifferenceBetweenPRandCitizenship WhatistheDifferenceBetweenGuarGumandPartiallyHydrolyzedGuarGum WhatistheDifferenceBetweenPPandPPSU WhatistheDifferenceBetweenTetanusandStrychninePoisoning WhatistheDifferenceBetweenSodiumLaurylSulfateandSodiumLauroylSarcosinate Home Vacancies About RequestArticle ContactUs
延伸文章資訊
- 1The Differences between a Chain Store and a Franchise
Most successful businesses and corporations can offer franchising opportunities to willing and qu...
- 2FRANCHISE vs. CHAIN: WHAT'S THE DIFFERENCE?
Chain stores are fully owned and managed by the parent corporation on behalf of the shareholders....
- 3Chain vs franchise: what's the difference?
To put it simply, in a chain business, a parent company owns all of the business locations. Where...
- 4Difference Between Franchise and Chain - Key Differences
A chain store refers to a retail sales establishment, owned and managed by a company and follow s...
- 5What Is The Difference Between A Chain And A Franchise?
As already mentioned, franchises are typically owned by local individuals. Chains are not. Chains...
