Making Profits with a Twist – Auntie Anne’s Pretzels
This is a good attitude to have when beginning a business, because it promotes solid values that the business will be based on, even after it succeeds. It also remembers the people in the community, the customers. A company will survive and thrive if customers feel cared about and welcomed to the business.
Customers are the livelihood of the business, and it’s important to care about them in the store, and outside it.
However, conflicts may arise. A business may not have enough money to keep itself going, much less give to the community. A business that suddenly does not give to the community could cause criticism. It can be difficult to make any profit when a decent chunk of money is going to the community. A company may take on more than it can really handle when it promises this. Depending on the size of the community, people may feel they are more involved in the business than they are, resulting in the business not being taken seriously, and possibly failing.
4. How do the advantages and disadvantages of franchise compare to other forms of business?
A franchise is a great business for someone who wants to go into business for his/herself, does not have the drive to build a business from scratch (as a franchise company already has a reputation and doesn’t need to build one), and wants the financial backing and security that comes with being a part of an already established business. The franchisee has corporate support, materials and recipes (in the case of a restaurant) provided. The only thing the franchisee needs to do is the day-to-day managing, and making some decisions about what products to carry, pricing, etc.
However, this also leads to a lack of freedom. In a traditional start-up business, a person does not have any backing besides his or her own money and possibly reputation as a person in the community. The company is far more likely to fail (franchises usually don’t fail). But, the person has the freedom to make any business decision he or she chooses. He or she can take the business in a new direction, offer or stop offering any products or services, and do anything at all. There is absolute freedom for a sole proprietorship. A partnership shares the financial risk, and has some limit on freedom (decisions made equally between all partners), but the business doesn’t arrive “ready made” like a franchise does.
It ultimately depends on what experience a person wants to have – security in business, or freedom to do as she/he pleases.
McHugh, McHugh, and Nickels. Understanding Business. Seventh edition. New York: McGraw-Hill Company, 2004.