Write a 13 page essay on Franchisees are an important source of innovation.Download file to see previous pages... Next, it contemplates on how innovation has become a complex question and tries to exp

Write a 13 page essay on Franchisees are an important source of innovation.

Next, it contemplates on how innovation has become a complex question and tries to explain it through the various models of innovation. Lastly, the various sources through which a franchising organization can practice innovation have been discussed.

The franchising organization is one in which the franchisee has purchased the rights to use the business methods, ideas and values that the franchisor has built for his company, organization, product or shop. It is like a person sells his business philosophy to another.

The franchisee usually opens up the franchise in some other geographical location than the one where the original brand exists. This actually lays the foundation for the franchisee to use innovation within the franchise. When the franchise will be in a different geographical location, the customers who will be coming to that franchise will be totally different, culture-wise, social-wise, and behavioural-wise. Thus, to bring changes within the franchise system would become easy.

Examples of franchises are McDonalds (the food industry), Benetton (the clothing industry), the Starbucks (the food industry), television shows like Pop Idol, Who Wants to be a Millionaire (the media industry), Body Shop (the cosmetics industry), Onebiz Group (consultancy franchisee) and others. Therefore, be it be any industry, the franchising option is available to all and sundry. This is because franchising is a form of business beneficial to both the franchisee and the franchisor.

The franchisee-franchisor relationship is complex, yet it is made up of basic components. Some of the basics of the brands of the franchisor need to be the same, so as to not eliminate the essence of the original brand. The various rights that the franchisee gets are that he can distribute the products of the franchisor, use the same techniques which they use to produce the products or market them. Moreover, even trademarks and patents are shared, since the franchisee becomes a representative of the franchisors product in some other geographical region. But when it comes to the invaluable intangible goods like trademarks and patents, the franchisee has to pay a certain amount of monthly fees for using them. This fee is separate from the fees that has to be paid for such rights in the first place. (Cox, 2007) Training is also one of the major things which the franchisor makes available to the franchisee as part of the rights that he gets. The franchisee-franchisor agreements will continue for minimum five years and maximum thirty years, after which the agreement will have to be renewed, if felt suitable by both the parties. In cases where the franchisee does misuse of the rights granted to him by the franchisor, the agreement has such clauses through which it can be easily terminated, for the benefit of the franchisor.

INNOVATION

In a world of intense competition, where companies are going global and where numerous companies are making strenuous efforts to get the attention of the consumer, it is immensely important to differentiate oneself from the rest so as to become noticeable. Consumers are the one who decide the brand or the company which is the market leader. It is the sales of the product which will ultimately make a product gain market share and then declare itself as the market leader, chosen by the customers themselves.