Thursday, April 30, 2020
The Al Hallab Restaurant Chain
Introduction In all entrepreneurship projects the decision making principles ascribed to it will either make or break the potential business. Success in all ventures is determined by how well the venture is planned, what goals are set in the beginning, how it plans to run its operations and finally what are its plans towards mitigating risk.Advertising We will write a custom essay sample on The Al Hallab Restaurant Chain and Its Decision Making Principles specifically for you for only $16.05 $11/page Learn More For this venture, the Al Hallab restaurant chain, the chosen decision making principles is that of effectuation whose tenets are based on controlling the future through meticulous planning in situations where there is a certain degree of uncertainty. In this case the uncertainty is whether or not a restaurant that specializes in Lebanese food will be able to become a success in markets that are already inundated with various restaurants with the s ame theme. The reason why Al Hallab is an effectuation entrepreneur can be determine due to these three factors: Patchwork Quilt: The basic product of the restaurant is Lebanese food yet it had gained main stream popularity in various consumer sectors despite the availability of similar types of food in other restaurants. The patchwork quilt principle of effectuation emphasizes the creation of something new through existing means. That is exactly what was done with the Al Hallab restaurant chain wherein the existing method of cooking Lebanese food was enhanced and brought into modern day mainstream consumption by modernizing its overall look and method of preparation as well as the ambience of the restaurant. As such the restaurant chain was able to discover a new way of achieving success by reinventing the way Lebanese food is consumed. Affordable Loss: The concept of affordable loss can be described in terms of committing to a particular business plan with the intent of focusing o n a particular consumer base and accepting that you will lose other types of customers. This can be seen is the emphasis of the Al Hallab restaurant chain on serving only Lebanese food. This means that it is forgoing the possibility of gaining other types of consumers by merely focusing on the type of consumers that enjoy eating Lebanese food. Pilot in the Plane: The concept of the pilot in the plane revolves around the concept of people and service and being the prime drivers of business operations rather than trying to focus on external opportunities such as producing a particular product at time when it is in demand and continuously shifting production to different types of products as demand changes without ascribing to a particular type of product.Advertising Looking for essay on business economics? Let's see if we can help you! Get your first paper with 15% OFF Learn More In the case of Al Hallab the focus is completely on the production and sale of Lebanese foo d despite the fact that it is losing consumers to other types of business with a more varied selection of products. Problems that Need to be Addressed with the Venture Market Saturation An investigation of the various areas near a particular Al Hallab restaurant reveals that on average the concept of a restaurant serving Lebanese food in locations such as KSA, Lebanon or Dubai is actually quite common. Al Hallab is not the only restaurant within a specific area that serves Lebanese food and at times it is not the most affordable. There are various restaurants that serve the exact same type of food yet are able to do so at lower prices. While it can be argued that the ambience of Al Hallab is better than the other locations the fact remains that due to the recent financial crisis various consumers located within Dubai and Lebanon have started changing their buying habits into a more conservative route due to the economic uncertainty affecting local and foreign markets. Combining the change in consumer behavior with the offerings of competitors near various Al Hallab restaurants presents a distinct problem that the venture must overcome in the near future if it is to stay in business. Changing Tastes In relation to changes in consumer buying behavior is a distinct change in consumer eating habits. As evidenced by recent reports on consumer buying behavior within the U.A.E. it can be seen that as of late consumers have been flocking to various fast food restaurants and establishments due to the convenience and affordability such types of food provide. While it may be true that the areas such as KSA, Lebanon and Dubai have had a long history of consuming Lebanese cuisine the fact remains that due to pop culture influences people have been increasingly turning towards modern rather than traditional eating establishments. What this means for traditional Lebanese restaurants such as the Al Hallab chain is that a growing percentage of its consumer base are starting to shift away from eating at the restaurant towards eating in other establishments that have a more ââ¬Å"modernââ¬â¢ flare. Another distinct problem is the fact that as of late new generations of consumers do not have the same tastes as the older generation, as a result restaurants such as Al Hallab find themselves with an aging consumer base that may run out as time passes.Advertising We will write a custom essay sample on The Al Hallab Restaurant Chain and Its Decision Making Principles specifically for you for only $16.05 $11/page Learn More Poor Customer Service While the quality of the food is unquestionable the level of customer service at Al Hallab leaves much to be desired. Various online restaurant review websites as well as general consumer opinion reveal that it is widely known that the customer service at Al Hallab is terrible. This ranges from gruff unsociable waiters, inefficient staff, unanswered phone calls to a plethora of other simi lar types of behavior that are discourage people from continuously visiting the establishment. With other choices available in various other restaurants within KSA, Lebanon and Dubai the service at Al Hallab definitely needs to be improved otherwise the chain may lose customers to places with better customer service. Possible Solutions to Indicated Problems One of the first problems that the venture must overcome is the concept that an Al Hallab restaurant does not have good customer service. Various studies show that consumers pick restaurants due to a variety of choices however customer service ranks among the top reasons aside from ambience and the taste of the food. While Al Hallab does not have any problems in relation to the taste of its products the fact remains that its poor customer service skills is detrimental towards more people visiting its various locations. Word of mouth goes a long way towards either promoting a business or causing it t close down due to bad press. B ased on this one of the first steps needed to be done by the venture is to have all its employees undergo extensive customer services training in order to improve the quality of service of the restaurant and encourage more consumers to come to the restaurant. The second problem that needs to be addressed is the changing tastes of the consumer market. Based on this what is needed for the venture is to possibly establish an extensive marketing campaign within a local area in order to encourage people to come and eat in the restaurant. The third problem is the market saturation of similar restaurants offering the same type of food. In this particular case in order to properly establish a restaurant in a particular location a market analysis must first be conducted in order to ensure that there are few competitors within the general area and that if an Al Hallab restaurant were to enter into that particular area it would immediately become a success. 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Saturday, April 11, 2020
Sample St. Louis Essay
Sample St. Louis EssaySample St. Louis essay for a Spring semester course at Stanford? It is true that writing a Stanford essay or Harvard exam is similar to writing a personal essay. Nevertheless, you should prepare for something that is different. This article provides you tips for writing a personal essay, so that you have a better chance of success.You will want to avoid the statement, 'I will accept to answer this question. ', which is common in St. Louis essays. Instead, it would be better to use a statement like, 'If I accept to answer this question, I feel that I have to research well the history and current experiences of St. Louis,' or 'If I accept to answer this question, I am preparing myself to write a formal research essay for my MA.'You should always give your essay details so that it is readable. Otherwise, it will be difficult to know whether the essay is appropriate or not. Furthermore, in the Stanford essay, you should carefully identify the perspectives you intend to include. In other words, you should put the correct characteristics on those perspectives.Always remember that St. Louis essays are not research papers. They do not require to be typed and do not have to be summarized. However, you should still carefully identify the essay objectives and refer to them at the end of the essay. You should also carefully note how the essay will be evaluated and what the expectations are.In St. Louis essays, you should address how the New Class effect has influenced St. Louis. Do not discuss how it has influenced your character or provide examples of its success.If you use pictures, you should include only those that help illustrate your point. Nevertheless, you should not use them as stimuli to answer the readers' questions. If you are discussing an event in the city or its city's history, you can present a brief account, but the reader can find this information elsewhere.Be sure to write the essay in a clear and straightforward manner. You should also avoid using headings in your St. Louis essay. Use a paragraph or two for each viewpoint. You can fill in the rest of the essay with supporting quotes and interesting stories.
Saturday, March 21, 2020
Language and Communication essays
Language and Communication essays Throughout Foe, J.M. Coetzee emphasizes the importance of language and communication in human interaction. Language and communication are reccurring themes that are personified mainly through the character of Friday. Friday is mute and not able to speak because he has no tongue. Though it is not clear how Friday lost his tongue, it is certain that Friday cannot speak. However, Susan Barton is able to speak as she possesses the means necessary for language, but she lacks communication skills. Though Cruso does not bother teaching Friday writing, Susan attempts to communicate with Friday but is not able to get through to him. Coetzee emphasizes the importance of language and communication through two central characters; Friday is the one not able to physically speak, however Susan truly lacks the necessary skills to communicate. Throughout the early stages of the novel, Coetzee shows that Friday is not able to speak and thus Susan dehumanizes him. Even though Coetzee never clarifies the true means by which Friday lost his tongue, it is obvious nonetheless that Friday is unable to speak. Susans first thought about Fridays inability to speak was that Friday was like a dog (21). Susan is baffled by Fridays silence and compares him to a dog. Though Cruso believes Friday has no need for words, Susan attempts to communicate once they have escape from the island. Susan has trouble teaching Friday words such as spoon and decides that perhaps after years of speechlessness the very notion of speech may be lost to him (57). Susan has lost hope of teaching Friday to communicate, however she continues to talk to Friday to educate him out of his so called darkness and silence, possibly because it gives her the satisfaction that she is making good on her less than ideal circumstances. Susan continues to doubt Friday and believes that the unnatural years Friday spent w...
Thursday, March 5, 2020
How to Find the Phoenix Constellation
How to Find the Phoenix Constellation The Phoenix constellation is a southern-hemisphere star pattern. Named after the mythical bird, Phoenix is part of a larger grouping of southern-hemisphere constellations referred to as the Southern Birds. Finding Phoenix To locate Phoenix, look toward the southern region of the southern hemisphere sky. Phoenix is located between the constellations Eridanus (the River), Grus (the crane), and Horologium, the clock. Parts of the constellation are visible to northern hemisphere observers south of the 40th parallel, but the best view is reserved for those living well south of the equator.Ã Phoenix constellation is a galaxy-hunters delight, with a number of galaxies and clusters. Click to enlarge. Carolyn Collins Petersen The Story of Phoenix In China, this constellation was considered part of the nearby Sculptor star pattern and was viewed as a fish-catching net. In the Middle East, the constellation was called Al Rial and Al Zaurak, the latter of which means the boat. This terminology makes sense, as the constellation is located nearby to Eridanus, the river constellation. In the 1600s, Johann Bayer named the constellation Phoenix and recorded it in his astronomical charts. The name came from the Dutch term Den voghel Fenicx or The Bird Phoenix. French explorer and astronomer Nicolas de Lacaille also charted Phoenix and applied Bayer designations to the brightest stars in the pattern.Ã The Stars of Phoenix The main part of Phoenix looks like a triangle and a lopsided quadrangle stuck together. The brightest star is called Ankaa, and its official designation is alpha Phoenicis (alpha indicates the brightness). The word Ankaa comes from Arabic and means Phoenix. This star is an orange giant located about 85 light-years away from the Sun. The second brightest star, beta Phoenicis, is actually a pair of yellow giant stars in orbit around a common center of gravity. Other stars in Phoenix form the shape of a boats keel. The official constellation assigned by the International Astronomical Union contains many more stars, some of which appear to have planetary systems around them. The constellation Phoenix as shown in the official IAU charts. IAU/Sky Publishing Phoenix is also the radiant for a pair of meteor showers called the December Phoenicids and the July Phoenicids. The December shower occurs from November 29 until December 9; its meteors come from the tail of comet 289P/Blanpain. The July shower is very minor and occurs from July 3 to July 18 each year.Ã Deep-Sky Objects in Phoenix Located in the far south position in the sky, Phoenix is far from the Milky Ways abundant star clusters and nebulae. Nevertheless, Phoenix is a galaxy hunters delight, with numerous types of galaxies to explore. Amateur stargazers with a decent telescope will be able to view NGC 625, NGC 37, and a group of four called Roberts Quartet: NGC 87, NGC 88, NGC 89, and NGC 92. The quartet is a compact galaxy group about 160 million light-years away from us.Ã The Phoenix Cluster galaxies seen in x-ray, visible light, and ultraviolet wavelengths. X-ray: NASA/CXC/MIT/M.McDonald et al; Optical: NASA/STScI; Radio: TIFR/GMRT Professional astronomers study these galaxies in an effort to understand how such giant associations of galaxies exist. The biggest one in the area is the Phoenix Cluster: 7.3 million light-years across and located 5.7 billion light-years away. Discovered as part of the South Pole Telescope collaboration, the Phoenix Cluster contains a highly active central galaxy that produces hundreds of new stars per year. Although it cant be seen with amateur telescopes, an even larger cluster exists in this region, too: El Gordo. El Gordo is comprised of two smaller galaxy clusters colliding with each other.
Monday, February 17, 2020
Latin american history Essay Example | Topics and Well Written Essays - 750 words
Latin american history - Essay Example analysis of the political and economic history of Columbia, Cuba, and Mexico, this essay demonstrates that the flawed economic policies of the countries are predominantly at fault. In Latin America, the 1980ââ¬â¢s are referred to as ââ¬ËDecada de aprendizaje dolorosoââ¬â¢ , or the decade of painful experiences. Nowhere were these experiences more evident than in Columbia. According to David Robinson, ââ¬Å"economic problemsâ⬠¦had a significant impact on the political systems in the region. Elected governments still tend to support their own interests or those of elite groups (Robinson).â⬠The government had increasing levels of foreign debt, which forced them to devalue the currency repeatedly. People from rural areas became poorer. Even the resource-rich Columbia faced internal problems of guerrillas and the drug cartels. According to a May 8, 1990 Time magazine article, kidnapping and murder of political aspirants became a routine affair carried out by the drug cartels, in order to influence the outcome of the elections. According to the magazine, 503 people were murdered and 18 kidnapped in a single week in May. From the United States per spective, Columbia is of national importance because of its geographic location and natural resources Although Columbia is an ally of the United States, 90% of the illegal cocaine in the United States comes from Columbia, which has still not become a safe place. Fighting continues between the armed groups maintained by the drug cartels and the government forces. A United Nations report indicates that ââ¬Å"2 million people have been displaced because of armed conflict in Columbiaâ⬠this year. Most of the internally displaced persons were Afro-Columbians, who fled because they were frightened of the fighting between the Columbian army and the armed groups operating near the Atrato river in north-western Columbia. Although a determined effort by the government to overcome the drug cartels has resulted in a semblance of order in
Monday, February 3, 2020
Report project for PepsiCo, INC Research Paper Example | Topics and Well Written Essays - 1250 words
Report project for PepsiCo, INC - Research Paper Example The company charged a depreciation expense of $ 1,500 million for the year ended December 26, 2009 on its property, plant and equipment while the depreciation charge for the year ended 2009 and 2007 was $ 1,422 million and $ 1,304 million respectively. These amounts do not include the amortization expense which is charged separately. The current ratio of the company gives an overview of the liquidity conditions of the company and is calculated as a proportion of the current assets of the company over the current liabilities of the company and is represented as a ratio. This ratio of the company expresses the sales that the company has generated through the use of the assets of the company and is computed by division of the revenue of the company with the total assets. This shows the efficiency of the company with respect to its assets. This ratio determines the proportions of the company debts over the availability of its equity in order to assess the companyââ¬â¢s going concern and the performance of the company in the long-term with its reliance on debt as compared to equity. The company has a favorable working capital and liquidity ratio as the company has enough working capital as a surplus over its current liabilities to expand its business as well as a current ratio of 1.44 represents that the company is well off when it comes to meeting its short-term obligations as well as other needs. The authorized share capital of the company as at December 26, 2009 is 3,600 million shares while the company has issued 1,782 million shares to public and other stakeholders of the company as at December 26, 2009. The dividend payout ratio of the company for the year was 46.58% as company declared a dividend of $1.775 per common share compared to an EPS of $3.81 for the year 2009. This indicates that the company has distributed almost half of its profits to the common shareholders. The net cash utilized by the company for its
Sunday, January 26, 2020
Franchising In Hospitality Industry Commerce Essay
Franchising In Hospitality Industry Commerce Essay The following paper deals with a recent type of management entitled franchising. In the hospitality industry and currently within Accor, the franchise has become a real stake and strategy to continue to perform. Accor Hospitality is an international player which has decided to turn its strategy into a franchise system that combines company owned hotels and franchisees. Nevertheless, such a network has to be livened up and controlled in order to perpetuate the reputation and then the business. Therefore the case study sustained by qualitative research aims at suggests recommendation to the company, but key issues need to be viewed and overcome first. Foreword This report is to summarize the experience of a six-month internship within the Business Intelligence department of Accor Hospitalitys headquarter, as well as to demonstrate my personal understanding of the changing of strategy, by confronting and comparing theory with practice, identifying its pros cons as well as its key factors of success in the hospitality industry. For my third and final year of business studies at INSEEC, I chose to major in International Business Strategy. This is a Master of Business qualification run in partnership with the SRH Hochschule in Berlin. The two main reasons for this choice were due to my strong interest in discovering many cultures and ways of conducting business and strategies. On the one hand, my strong interest in acquiring skills in business analysis in the hospitality industry, combined with the importance of the hospitality industry worldwide, oriented my applications to Business Analysis positions within this sector. On the other hand, my personal motivation for discovering new cultures, coupled with my academic qualifications and my language skills also encouraged me to apply in International companies where I could speak as much English as possible. As a French student extremely interested in working in a multicultural environment, the ACCOR group seemed to be a fantastic opportunity. As a Business Analyst I was part of the Business Intelligence team and reported directly to the Director of Strategy and Business Performance. I had to have full experience of distribution, and work on the different aspects of analyzing the business that such a position commands. My personal mission within the team has been to provide support to the two Business Analysts, and help them make reports related to the Distribution strategies. As a team, we were accountable to understand the needs of the various brands and teams, then to create tools to provide accurate information (project managers) and finally to analyze the data (business analysts). Therefore, in my position, I was in charge of carrying out three main functions: Updating the Distribution Monthly Report for the Top Management for both Direct and Indirect Sales Analyzing the hotels performance worlwide Answering to Adhoc demands in order to measure the impact of promotional offers. This report, however, has its limits. A valid quantitative study for example, would have allowed me to support and corroborate my findings with the franchisees satisfaction and suggestions regarding their links with the franchisor. As well, it would be promising to investigate some topics as for example the behavioural customer evolution regarding the hospitality industry or develop further some of the challenges the hospitality industry is facing applying Dynamic Pricing, as they could easily be the subjects of a study on their own. Finally, both on a personal and professional level, my experience within Accor Hospitality headquarter in Evry has been a real success. All I can believe for the future is to have a chance to further develop my analysis skills in similar conditions: team spirit, communication and trust. Acknowledgements Firstly, I am extremely grateful to Pierrick Le Masne for giving me the chance of being parts of the Strategy and Business performance department within the ACCORs headquarter in Paris. I would like to express many thanks to Alison Broussy for welcoming me in her Business Intelligence team and sharing her expertise, training and giving me the opportunity to further develop my business analysis skills over the last six months. I would like to add special thanks to Nicolas Leseurre, Fara Rabesoa, for sharing their experience and knowledge with me. I am also thankful to Isabelle Duflot and Olivier Poujol for sharing their thoughts and opinions regarding Project Management. Finally, I would like to thank the overall team for the warm welcome and team spirit I have received since being part of this company these past few months. Table of Content Introduction 1 Tapez le titre du chapitre (niveauà 2) 2 Tapez le titre du chapitre (niveauà 3) 3 Tapez le titre du chapitre (niveauà 1) 4 Tapez le titre du chapitre (niveauà 2) 5 Tapez le titre du chapitre (niveauà 3) 6 Introduction Franchising is an ancient type of network that is simple, formalized in its organization and in its functioning (Anderson and Coughlan, 2002; Blair and Lafontaine 2005). However, literature on the control of the franchising network are seldom particularly in France, whereas it is a rich and interesting lead of research (Elango and Fried, 1997). Franchising is a way of doing business that has grown fast, and more particularly in Europe. The reason can be found in the will for the franchisor to develop its network quickly and for the franchisee to benefit from an expertise in a specific field. France is the European leader and has seen its franchising network doubled within the last ten years and acknowledges a constant growth between 8% and 11% for 5 years. Even in a crisis period, franchising has continued to grow thanks to the support and training provided by the franchisor. All sectors taken together, France owns 1,234 networksà [2]à of franchisor and 49,094 franchisee, and realizes a turnover of about 47.7 billion Euros in 2008. Franchising has been defined as a system of marketing goods and/or services and/or technology, which is based upon a close and ongoing collaboration between legally and financially separate and independent undertakings, the Franchisor and its individual Franchisees, whereby the Franchisor grants its individual Franchisee the right, and imposes the obligation, to conduct a business in accordance with the Franchisors concept.à [3]à In other word, the definition underlines that a franchising network is a complex organization where the relationship and trust between the franchisor and franchisees are essential. When a company decides to develop its know-how into franchising it is because the company has gained a certain maturity and expertise in its activity and then will be able to convey the operational management to its franchisees. Within the Hospitality Industry, it exists different ways of managing a hotel. Indeed, a hotel can be a subsidiary as an entire part of the corporate company, a managed hotel or a franchisee. ACCOR is a company that has been created in 1967 with the first opening of a Novotel. Then, step by step the company has opened several hotels in France and in Europe and further worldwide. Owning many hotels the company has known how to become a leader in that field. Today, leader in France and in Europe, the company wants to become more present worldwide and has recently decided to change its business model. This changing of strategy called asset right is a real stake because it is going to disrupt an organization which relies on a family mind, history and way of running the business. As a part of the Accor team, this research would like to expose the changing of the Accor strategy from an hotels owner to a franchisor. The case study would outlines how the company can optimize the relationship between itself and its franchisees within a mixed network. Chapter One: Theory on franchising The first part deals with the analysis of the franchising system in its complex form. The key concepts to understand the overall functioning of the franchise are developed. 1.1 History of franchising The franchise business model was born in the United States of America, especially encouraged by the antitrust laws. This solution can be explained by the size and the importance of the American market that forced the societies to turn into a system enabling the increase of the market shares without huge investments. Nowadays, the number of franchisees reaches 760,000 in the United States spread out 1500 networks that represent a turnover of more than 1500 billion dollars and employs 9.7 million people in 2004.à [4]à In France, the first franchised network appeared around 1930 a little time after the creation of the wool producer in Roubaix. The phenomenon of franchise has been developed further, at the beginning of the seventies, in order to modernize the convenience trade and create a real competition to the Big boxes. Today France is the leader of franchising in Europe and concerns various types of activity such as fast food industry, bakers, apparel and hospitality industry. 1.2 Concepts and definition In a franchising system, the franchisor grants its knowhow and its trademark to franchisees, which are independent and have the contractual obligation to exercise the activity described into the respect of rules and procedures defined by the franchisor. The latter must follow the concepts exploitation and provide support to its franchisees. The franchisor is paid by an entrance fee at the signature of the contract and also by regular royalties based on the franchisees turnover. The contract of franchise has a variable length often comprised between five and ten years. Thus, the franchise includes a key firm, the franchisor, and multiple satellites firms, legally and financially independent called the franchisees. Usually, the franchisor brings intangible assets (products, services to develop, know how or trademark), whereas the franchisee provides financial and human assets. The purpose of the agreement is the exploitation of the concept developed by the franchisor. The franchise seems to be a special type of network where there is an inter-organizational division of the work. The franchisor is in charge of the strategic activity whereas franchisees work more on operational activities (Frà ©ry, 1996). Skills and resources mobilization within a franchising system are more carried out in logic of exploitation rather than propriety (Frà ©ry, 1995) because associates are independent. Therefore there is coexistence of economic dependence and legal independence between partners of the franchise. Sometimes the franchise network is described as unstable because the key firm could try to own the most performing units.à [5]à Many franchising network are mixed because they combine company owned units and independent franchisees. This is the case for instance in Hospitality industry. This specific kind of network enables to mix the experience effect from company owned units with the human and financial power of the franchisees. Indeed, information available from company owned units are used to negotiate and attract new franchisees. The franchising network enables a mutual process of learning that can lead to trust relationship between the franchisor and franchisees. To sum up, a franchise system is composed of: A purpose: repetition of a commercial success Supplementary resources from both sides Favourable institutional framework Interactive relationship between players. A purposeà due to a commercial success Franchising system Supplementary recources Interactive relationship between players A favourable institutional framework Figure 1 The franchising system 1.3 Purpose of the franchise system Each side of the franchise system finds an advantage of coming into this specific type of network. The franchisor hopes to develop its network as quick as possible in a part to compete with others chains and then to obtain geographically the best places. Entrance fees and royalties ensure a permanent payment. However the franchisor must control the concepts development and has to be sure that the offer is as consistent and homogeneous as possible. Regarding the franchisee, he develops the commercial offers in being supported by the franchisor in terms of training, advisory, innovation. The franchising system enables to get an access to information from people who are in direct relation with the client and particularly in a mixed network (Perdreau, Le Nadant and Cliquet, 2007). Because of the information sharing, new franchisees know a failure rate under the average failure rate of any new created enterprise.à [6]à 1.4 The legal framework of a franchise system The basis of the franchise can be found in the legal contract and the code of practice that both parties have to sign in order to create right and duties to respect. The franchise contract, one of the foundations of the franchise system is a contract in which the owner of a distinctive sign, generally registers the brand name (the franchisor) and grant it to an independent storekeeper (the franchisee). The owner holds an advisory and commercial assistance role whereas the franchisee has to pay to enter into the franchise and a fee based on the turnover of the shop. Sometimes the contract can also commit the franchisee to buy equipements and furnitures to the franchisor and to respect standards and certifications in the management of the units.à [7]à The franchise contract must be in compliance with the national law, European law and the code of practices. It describes the interests of members of the franchise network in protecting the franchisors patent rights and in maintaining the common identity of the franchise system. The key points of the contract are the following: The franchisor and franchisees rights and duties Goods or services provided to franchisees The length of the contract The payment terms for the franchisee Renewal terms Termination contract clause, clause of non competition Franchisors duties Franchisees duties Definition of the concept/ innovation regarding the concept to stay competitive/ Ensure a stability in the network Financial duties: entrance fee/ marketing and advertising fees/ Royalties Development of the brands/ of the trade name Respect of the global concept, respect of the trade name, respect of the clauses of the contract, return of all documents and tools at the end of the contract, Convey a knowhow, tools, support Sometimes, exclusivity of supply Table 1 Focus on the basic duties for both parties in the franchise contract Nevertheless, the partners motivations are quite different and can lead to an opportunistic behavior from both parties. Conflict of interests can appear when there is an alignment of interests and behaviors of the franchisor and franchisees (Dant and Nasr, 1998). Indeed, the franchisor is concerned by the profitability of the network and the strengthening of the reputation of the brand (long and middle term objectives) while franchisees seeking short term profitability sometimes in not taking care of the brand image. In the theory of contracts and franchise network (Penard et al., 2004), it has been pointed out that the franchisor can miss to its duties of support, but he can also prevent the franchisee to manage freely its unit or impose a price of sale. The franchisor should have in that field a role of adviser because according to the European lawà [8]à , he cannot take an active part in the management of the franchisees unit. In a franchising system, even if it is against the law, the franchisor could give more importance to its company owned units instead of being neutral. However the franchisees can sometimes fail in its duties as well when he does not respect its commitment regarding the commercial standards of the franchisor, some delays in the payment of fees or a lack of cooperation in the data transfer when the franchisor is auditing the unit. 1.5 The relationship between the franchisor and the franchisees The franchise system does not include only two players (the franchisor and the franchisees) but four players according to the French Franchise Federation (2004): The franchisor, an independent contractor that can be a corporate body or a natural person. The franchisee, an independent contractor, corporate body or natural person that has been selected by the franchisor. The network, made up of the franchisor and franchisees. They all work under the same trade name which is a symbol of identity and makes the reputation of the network. The customer who buys for himself products or services and who does not want to know if behind there is a franchisee or a company owned unit. He only seeks a certain quality that makes the brand that known. Figure 2 The conceptual Framework Will to start a business Business ownership Business site Knowledge of the local market Access to the customer Surety of satisfaction/loyalty Know-how Marketing success Distinctive concept Strong brand Surety of turnover Surety of efficiency Franchisors resources Franchisees resources In order to make the franchising concept works efficiently, both side have to work together. To help and protect them, it exists a legislation framework. The contract has to be balanced in order to satisfy both parties. The turnover has to be shared according to the agreement the parties agreed upon. Three decisive factors make a franchising system (Jauffrit and Sie, 2010) efficient. First of all, the quality of the business model and the conditions to test it at the beginning of its creation are essential. The strength of the resources available is also important: financial, technical and above all the human resources from both sides and the quality of the cooperation. Moreover the network should be developed as quickly as possible in order to reach the critical size and make economies of scales. The latter enables to develop the brand, to stretch over the territory, to pay the common equipment, and benefit from purchasing cots more interesting. All these factors permit the access of a well ranked position and gain a competitive advantage.à [9]à 1.6 Different ways of controlling in a franchise system In the hospitality industry it exists four categories to control a network (Baglin and Malleret, 1995). The legal control is essential in a integrated network where it exists a capital-intensive link between the company and its manager, but has a less importance in a franchise system. The control on the product or service enables to keep a certain level of standardization defined in the contract and can be completed by the visit of mysterious client or a network coordinator. The respect of the norms is essential in an international network where the brand offers a standardized product or services. It enables to keep a certain consistence in a brand within peoples mind. The control of the financial management, based on the reporting and budget, are partially practiced in a franchise network. The key performance indicators are centralized within a detailed reporting as the fees and royalties are usually calculated on. Regarding the specific performance of a franchisee, the methods are generally advised and supervised but seldom imposed because the law restricts the franchisor to manage and handle the franchisees business. The franchisor has a role of advisor and assistance. Finally the control of human is applied during the recruitment, training and payment. The payment of the franchisee depends on the profit of its business after having paid the franchisor royalties and fees. The franchisor uses its control only when he recruits a new franchisee and when he liven the network up. Controls in a franchise system seem to be rather technical because the franchisor has to be sure that the franchisee respects the offer and the level of standards. 1.7 Focus on the technical control One of the most important difficulties in a franchise system concerns the asymmetry in the information exchange. The franchisor can visit the franchisee, can employ a mysterious visitor to control and can measure the retro claims regarding a specific franchisee. Nevertheless, the dissatisfaction of customers is measured in a satisfaction survey conducted when the malfunctioning has already been realized. However the franchisor can today use new information system tools. He can follow in real time the activity of a franchisee, for instance through an Enterprise Running Planner, and ensure a good visibility. The gathering of data and information can thus be done without supplementary costs and at anytime (Boulay and Kalika, 2007). In addition to the real advantage of such tools, it has an effect on the franchisees behavior and enables to exercise a constant control in the network operations. Chapter Two: Theory on franchising Le desinvestissement par la franchise
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