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IntroductionDerived from a French word Fransis meaning privileged or freedom

A franchise is a form of business ownership created by a contract whereby a company grants a buyer the rights to engage in selling or distributing its products or services under a prescribed business format in exchange for royalties or share of profits. Franchise SystemFranchise Agreement

Franchisor

FranchiseeFranchiseePays Up-Front CostsMakes Monthly Payment to FranchisorRuns Business by Franchisors Rules/ProceduresBuys Materials from Franchisor/ Approved SupplierAdvantages of Franchising to the franchiseeEasy to get startedReduces chances of failureProduct Acceptance (Recognition)Mgmt. ExpertiseBuying PowerMarket KnowledgeAdvantage of R & D facilityFinancial Advice and help

Franchisor ProvidesFacility Layout

Control Stock & Inventory

Buying Power

Advertising/Sales Promotion- Local & National

Disadvantages of FranchisingNo scope for creativityRestrictions on franchisee in terms of product line and geographical operationsDo not have the right to sell their business to the highest bidder or leave it to the family memberGoodwill remains the property of the franchisorFailure of franchisorThreat of buyback upon termination of the contract

Advantages to FranchisorAdvantagesQuick Expansion & Little CapitalLarge Operation Yet Few HQ EmployeesEconomies of ScaleLarge Advertising BudgetDisadvantagesDifficult to find quality franchiseesSingle franchisee failure reflects on entire systemExpansion creates loss of controlFranchise Capital RequirementsFranchise/Royalty Fee

Construction Costs

Equipment PurchaseFranchise Types1. Product Franchising

2. Manufacturing Franchising

3. Business Format FranchisingContdConversion FranchisingMultitasking FranchisingMaster FranchisingLegal Framework for Franchising in IndiaIndian Contract Act 1872Intellectual Property Act and Copyright Act, 1957Competition LawsConsumer Protection Act 1986Evaluation of Franchise ArrangementEvaluate your selfResearch MarketEvaluate all franchising opportunitiesInvestigate the business partnerTalk to existing franchisees

6. Starting an E-Commerce VentureElectronic commerce or e-commerce refers to a wide range of online business activities for products and services.It also pertains to any form of business transaction in which the parties interact electronically rather than by physical exchanges or direct physical contact. E-commerce is usually associated with buying and selling over the Internet, or conducting any transaction involving the transfer of ownership or rights to use goods or services through a computer-mediated network.

Difference between E-Commerce and E-BusinessEcommerce is part of e-businessE-business is a structure that includes not only those transactions that center on buying and selling goods and services to generate revenue, but also those transactions that support revenue generation.These activities include generating demand for goods and services, offering sales support and customer service, or facilitating communications between business partnersBenefitsOvercome Geographical Limitations Gain New Customers With Search Engine Visibility Lower Costs Advertising and Marketing PersonnelReal EstateLocate the Product Quicker BenefitsEliminate Travel Time and Cost Provide Comparison Shopping Enable Deals, Bargains, Coupons, and Group Buying Provide Abundant Information Create Targeted Communication Remain Open All the Time Create Markets for Niche Products Popular Products/ServicesAirline and travel ticketsBanking services, Books, Clothing, Computer hardware, software, and other electronics, Flowers and giftsLimitationsTechnological and inherent limitationsLess penetration of PCs, credit cards and internetSecurity concernsDigital IlliteracyNot suitable for perishable commodities Different Types of E-CommerceBusiness-to-business (B2B)B2B e-commerce is simply defined as e-commerce between companies. This is the type of e-commerce that deals with relationships between and among businesses. About 80% of e-commerce is of this type.

Business to- consumer (B2C) Business-to-consumer e-commerce, or commerce between companies and consumers, involves customers gathering information; purchasing physical goods (i.e., tangibles such as books or consumer products) or information goods (or goods of electronic material or digitized content, such as software, or e-books); and, for information goods, receiving products over an electronic network.It is the second largest and the earliest form of e-commerce. Its origins can be traced to online retailing (or e-tailing). Thus, the more common B2C business models are the online retailing companies such as Amazon.com, e-bay.com, flipkart.com etc.Business-to-government (B2G)Business-to-government e-commerce or B2G is generally defined as commerce between companies and the public sector. It refers to the use of the Internet for public procurement, licensing procedures, and other government-related operations.Consumer-to-consumer (C2C)C2C is simply commerce between private individuals or consumers. This type of e-commerce is characterized by the growth of electronic marketplaces and online auctions, particularly in vertical industries where firms/businesses can bid for what they want from among multiple suppliers.M-commerce Mobile commerce is the buying and selling of goods and services through wireless technology-i.e., handheld devices such as cellular telephones and personal digital assistants (PDAs). Japan is seen as a global leader in m-commerce. Eg. Mobile Banking

Reasons for Fueling E-CommerceEconomic ForcesReduction in communications costsLow-cost technological infrastructure Speedier and more economic electronic transactions with suppliersLower global information sharing and advertising costs

Market ForcesCorporations are encouraged to use e-commerce in marketing and promotion to capture international markets, both big and small.

The Internet is likewise used as a medium for enhanced customer service and support.

It is a lot easier for companies to provide their target consumers with more detailed product and service information using the Internet.

Technology forces. The development of ICT is a key factor in the growth of ecommerce.This has made communication more efficient, faster, easier, and more economicalComponents of E-commerce TransactionThe Seller should have the following components: A corporate Web site with e-commerce capabilities (e.g., a secure transaction server); A corporate intranet so that orders are processed in an efficient manner; IT-literate employees to manage the information flows and maintain the e-commerce system.

Transaction partners include:

Banking institutions that offer transaction clearing services (e.g., processing credit card payments and electronic fund transfers); National and international freight companies to enable the movement of physical goods within, around and out of the country. For business-to-consumer transactions, the system must offer a means for cost-efficient transport of small packages (such that purchasing books over the Internet, for example, is not prohibitively more expensive than buying from a local store); Authentication authority that serves as a trusted third party to ensure the integrity and security of transactions.

Consumers (in a business-to-consumer transaction) who:Form a critical mass of the population with access to the Internet and disposable income enabling widespread use of credit cards; andPossess a mindset for purchasing goods over the Internet rather than by physically inspecting items.

Firms/Businesses (in a business-to-business transaction) that together form acritical mass of companies (especially within supply chains) with Internet access and the capability to place and take orders over the Internet.

Government, to establish:A legal framework governing e-commerce transactions (including electronic documents, signatures, and the like); andLegal institutions that would enforce the legal framework (i.e., laws and regulations) and protect consumers and businesses from fraud, among others.

And finally, the Internet, the successful use of which depends on the following:A robust and reliable Internet infrastructure; andA pricing structure that doesnt penalize consumers for spending time on and buying goods over the Internet (e.g., a flat monthly charge for both ISP access and local phone calls).

E-Commerce Business ModelsMerchant model:This model basically transfers the old retail model to the e-commerce world by using the InternetSelling goods and services over the Web.Amazon.com is a good example of this typeBrokerage model: The e-business brings the sellers and buyers together on the Web and collects a commission on the transactions by using this model.Advertising model: This model is an extension of traditional advertising media, such as television and radio. Search engines and directories such as Google and Yahoo provide contents (similar to radio and TV) and allow the users to access this content for free. By creating significant traffic, these e- businesses are able to charge advertisers for putting banner ads or leasing spots on their sites.Info-mediary model: E-businesses that use this model collect information on consumers and businesses and then sell this information to interested parties for marketing purposes.Subscription model: An e-business might sell digital products to its customers, by using this model. The Wall Street Journal and Consumer Reports are two examples.