Features of joint venture & franchising

Features of joint venture & franchisng

Answer:

1)    Franchising:

            Franchising is the practice of the right to use a firm’s business model and brand for a prescribed period.

Features of Franchiisng:

                        There are several essential features to look for when evaluating any franchise        business. Here are the top six:

1)      Stable industry:

               You need to be marketing something that will be profitable no matter the economy. one example is a disaster restoration franchise in which the franchisee organize the clean – up process for business when fires or water damage occurs.

2)         A necessary, recession – resistant product or service.

               Choose something that consumers either don’t have time to do make or despise     doing and, thus would rather pay someone also for. Stay away from fads, as they are   unpredictable and don’t provide longevity.

3)         Market potential versus the competition.

               It’s wise to choose a franchis that has little or no competition from other similar,   established franchises. You would not locate a quizenos franchise within a block of to sub ways that have been there for two years and are always crazy busy. Ideally, pick a             franchise where your main competition comes form small mom and pop stores, which          allow you to dominate and thrice

4)         The leader in its category.

               A major contributor to your potential success a franchises is teaming with a           franchise in which they are the undisputed leader.

5)          A dominant brand

               Brand recognition is huge

                           Aamco = transmissions.

                           Fantastic sams = hair care

   This is a major reason to franchise in the first place.

6)         Growth opportunities:

               Look for a franchise that encourages you to buy a 3 pack or a 5- pack or one that               markets the right to become an area developer or a master franchise. These are strong       indictors that the franchise is thriving and planning to expand and grow the business.

2)    Joint venture:

A joint venture is a business arrangement in which two or more parities agree to pool their resources for accomplishing a specific task other business activity.

Features of joint ventures:

1)         Joint venture is a special partnership without a firm name.

2)         Joint venture does not follow the accounting concept going concern

3)         The members of joint venture are known as co- ventures.

4)         Joint venture is a temporary business activity

5)         In joint venture, profits and loses are shared in agreed proportion. If there is no agreement             regarding the distribution of profit, they will share profit equally.

6)         Joint venture is an agreement for polling of capital & business abilities to be employed is some profitable venture

7)         At the end of venture all the assets are liquidated and liabilities are paid off. If necessary the assets & liabilities could be shared by co – venture.

8)         Joint venture always follows cash basis of account.

9)         The dispute resolution must be effective easy and cheap to execrate

10)     The purpose of joint venture must be clearly defined.