Three subdivisions of first generation franchising include Manufacturer-Retailer Franchise which a manufacturer grants the right to a retailer to sell the product to the final consumer (i.e. commonly found in automobile dealership), Manufacturer-Wholesaler Franchise which a manufacturer grants the right to a wholesaler to distribute a product (i.e. commonly established in soft drink industry, for instance Coca-Cola) and Wholesaler-Retailer Franchise which a wholesaler grants the right to a retailer to trade under a certain name (i.e. commonly found in American drugstores and variety shops, and voluntary trading groups). .
Vaughn's suggestion on type of franchise includes Retailer-Retailer Franchise which occasionally rephrased as business format franchising'. Business format franchise is an ongoing business relationship between franchisor and franchisee which not only includes product service, and trademark, but the entire business concept itself. This comprises a marketing strategy and plan, operating manuals and standards, quality control, group purchasing power, research and development, and a continues process of training, assistance and guidance (Khan, 1992; SBA 1999). .
Peter Hall and Rob Dixon (1989) proposed that business format franchises can be categorised into three broad categories which distinguished by the level of the investment needed from the franchisee. First of all, Job' franchises require a nominal financial investment from the franchisee and do not require premises (i.e. one-man operations, such as domestic maintenance services and mobile vehicle servicing). On the other hand, Business' franchises require much larger investment in stocks, equipment and business premises. Since, the scale of operations are much larger than that Job' franchises, franchisee will usually employee additional staff in order to operate business effectively. This category of business format franchising has vast range of business (i.
