Intrapreneurship and Corporate Venturing 419related to a named franchise business or which has any significant financial impact on a fran-
chisee or prospective franchisee.”^16- Know your legal rights and retain counsel.
Key Terms
Area franchise agreements Franchisor
Business format franchise Individual franchisee agreement
Distributorship Master franchise agreement
Exclusive right to trade Multiple unit franchise
Franchisee Pilot stores
Franchising Registered trademark franchise
Discussion Questions
- Are franchisors entrepreneurs? Are franchisees entrepreneurs? Give reasons for your
answers. - Why has franchising been so successful in the United States? Does it have the same poten-
tial worldwide? - Why is the pilot store so important for the potential franchisor?
- What are the characteristics of a franchiseable business?
- What is the nature of the dependency between franchisor and franchisee?
- What should a franchisee look for in evaluating a franchise opportunity?
Exercises
- Interview a local franchisee. Ask the franchisee about his or her relationship with the fran-
chisor. What are the problem areas and the positive points? How does the future look? Find
out whether the franchisee is satisfied and would do it again. - Request a package of material from a franchisor. Advertisements for these can usually be
found in Inc. or Entrepreneur magazines, among other places. Evaluate the material. Does
it answer the questions a potential franchisee will have? Follow up by calling the franchisor.
What additional information can you obtain this way? - Evaluate your own business plan for its franchiseability. Does it meet the criteria for fran-
chising? If so, develop a franchise plan.