e. takeaway foods, business service such as accounting). The Investment' franchises require considerably high investment from the franchisee and the prime interest of franchisees lies on return on their capital investment rather than providing themselves with employment (i.e. franchised hotel).
CHAPTER III.
CHARACTERISTICS OF FRANCHISING.
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3.1 INTRODUCTION.
There are distinguished characteristics in franchising. The contractual relationship is one of the most distinguishing aspects of franchising. In this chapter, brief overview of contractual relationship will be observed. Moreover the advantages and disadvantages of franchising for three main participants including franchisor, franchisee and customer will be illustrated. Moreover four different types of franchisee will also be studied as they are somehow different in attaining advantages and disadvantages, however, the statement of advantage and disadvantage of franchisee will be generalised as this study is looking at the problems in industrial level. .
3.2 CONTRACT.
Franchising is a standardised business process that franchisees with lack of business know-how can easily adopt. The fundamental of franchising lies on mutual trust and contract. Thus, basically, franchising will be including following means:.
• The existence of written contract that describes responsibility and obligations between two participants (franchisor and the franchisee).
• The existence of strong cooperative relationship in continuous manner.
• Franchisee will be running business under franchisor's brand name marketing plans.
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Since, these contractual structures and business processes, the franchisor and the franchisee, the individual businessman with different positions, reflect an image to customers that the brand is operated in same source of capital, in other words, this reflects as an individually owned company (Korean Convenience Store Association, 1995).
