Students Essay On Differences Between Chain Stores And Franchises

Students Essay On Differences Between Chain Stores And Franchises 

Introduction
A franchise is a word that is used to describe a single business or number of businesses that use the same business model but may not be necessarily owned by the same person. A person may a personally owned business or businesses, which are very similar to other businesses in terms of the title or even how it is operated but the two are separately owned. A chain store on the other hand is a number of businesses widely distributed but share the same central management. Chain stores share the same business model and are owned by the same individual or corporation who began the models.

The Differences between Franchise and Chain Store

They may be a number of retail outlets, which are owned together. Due to this contrast, the two have very many differences, which make them distinct in their own way. One of the differences is the fact that the owner of a franchise is supposed to pay the beginner or founder of the franchise for using the business model (Bradach, 1998). The franchisee also agrees to run the business according to the ways of the franchise owner. This is not the case when it comes to the chain stores they have a central management.

Another difference between the two is the fact that the franchise is headed by the owner who is self-employed and answers to no higher authority on issues concerning the business whereas a chain is headed by a manager who answers to the corporation or the owner of the entire business (Roos, 2010). The manager ensures that the stores run smoothly according to the orders from the owner or corporation. It is thus important to note that the manager is not the owner of that business and thus has no right to make any direct decisions about the business that may greatly affect the business (Spinelli, Rosenberg, & BIRLEY, 2004).

References

Bradach, J. L. ( 1998). Franchise Organizations. New York: Harvard Business Press.
Roos, M. (2010). Chinese Commercial Law: A Practical Guide. Netherlands: Kluwer Law International.
Spinelli, S., Rosenberg, R., & BIRLEY, S. A. ( 2004). Franchising: Pathway to Wealth Creation. München: FT Press.