Pros And Disadvantages Of Franchising

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Franchising For starting a business from zero for developing identity, creating brand image, perfecting the product or service, and pricing so to finally go out and start the takes a lots of time to decided and do that. A franchise is like a ready to run business package. In many cases, a lot of that initial branding and identity creation is done. So it is an easy way to simply go out and start getting customers quickly. Benefit: For our cases, we will be the franchiser. Franchising can have a smaller central organization compared with owning all shops for ourselves. We just needed to operate a relatively small organization there to work with others franchisee. When we enter Malaysia, the main benefic is that we can use less capital…show more content…
We need to provide the right of use to trade mark, trade names, logos, patents, trade-secrets and know-how of a business. When we transfer all the business model, secrets to the franchisee, they might steal all the confidential data and run another business or disclose confidential information thought social media as social media is the most trending communication channel. It will be very dangerous that the secrets leak to others and lost or competitive advantage just like how to make good herbal tea for Hung Fuk Tong. If the formula has leaked out, then other company maybe very easy to duplicate our…show more content…
These licenses are usually non-exclusive, which means they can be sold to multiple competing companies serving the same market. In this arrangement, the licensing company may exercise control over how its intellectual property is used but does not control the business operations of the licensee. Benefit: As we are licensor in this situation, we can avoids the cost and the risk in step into a foreign market. This action will invest a little amount cost for the company to increase our brand name in others counties market. As there may be lots of laws to protect the local company, using licensing just approve others companies to use our intellectual property, so most of the investment barriers can be avoids. Besides from that, we can see the market opportunities of the foreign market without doing research locally. The licensee will help us to test the market without paying to them. Like Hung Fuk Tong, they can avoid Malaysia law of food and beverage if the just licensing the product or brand name out. Also, the licensee will help Hung Fuk Tong to test the market opportunity even new products in the market such as turtle jelly. Besides that, the company can doing those mentioned actions without lots of

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