Business Report on Lauras Choice of Franchise
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This business report specifically targets the main features needed in order to make youre business successful. The report will highlight different aspects of running and controlling a new business. For instance, I will be talking through the type of promotion methods; which are most likely to appeal to your type of business. Also, I would be talking about the pricing strategies that I will highly recommend. Furthermore, I will guide you through the perfect business type which is most suited to you.
In the business field, there is a wide range of options when setting up a business. The most popular type of business, which is most frequently used, is a franchise. A franchise is when an entrepreneur (the franchisee) buys into an existing business from the owner (franchisor) and set it up as its own.
The reason why a franchise is most commonly used is because; it is less risky than starting up an independent retailer. Also, youll be given a designated area where other businesses of the same company, would not penetrate your location. Furthermore, the promotion of the product would have already been developed, as the company would have advertise the product on a national scale; making the public aware of the product.
Although a franchise is popular in the business field, it has many downsides. A drawback on choosing a franchise is that, a large sum of capital would be needed up front, in order to set up the business. This could impact on many people who want to start up a franchise as they would not have the amount needed to set up the business. Furthermore, the franchisee would have to pay royalty to the franchisor, despite making a loss. This would usually leave the business bankrupt, as they would not be making any profit.
One major point, which could affect your choice on a franchise, is that you would have no control over your business and you would have to buy the ingredients from the company. This is because the company will make all the main decisions, which they would believe is suitable for the company. This could impact your business dramatically, as if you would set up your business in a local area such as Sparkhill: 95% of the population is Muslim. Therefore, selling pizza that contains ham and pork would not encourage potential customers to buy the product. This is due to the belief Muslim have on eating foods that come from a pig, as it is forbidden in Islam and Judaism. Hence, the business would be bankrupt, as youll be making a substantial loss in selling the product and you would still have pay royalty to the franchisor. However, if you would to set up your business in Solihull; 89% of the population is not Muslim. Consequently, the business would be making a huge amount of profit, as the pizza that contains ham and pork is most popular amongst non-Muslim and Jewish people.
Moreover, if you would to open a popular franchise in Sparkhill, the socio-economic group is mainly to be C2, D and E. The majority of the population within the area would less likely buy pizza from a well known brand, as it would be too expensive to purchase. Whereas, if you would to franchise a well known brand in Solihull; where the socio-economic group is mainly to be C1, B and a small number of group A. The business is more likely to thrive,