Comparison between two franchises - Proposal - Research Paper Example

The first is assumed to be Quiznos, a fast food sandwich outlet which offers franchising opportunities for an initial investment of only $5000. The other franchise is Pitapit, which has a much more expensive initial investment, i.e, $255,614 in order to start. The time frame which is assumed for purposes of this research project is ten years and both costs and revenues are evaluated over a ten year period, in order to arrive at a conclusion as to which would be the better business opportunity for an investor over a long term period.

One of the first advantages of franchising is branding, wherein a franchisee acquiring an interest in the business is able to offer a strategic identity which has a good market impact. In essence, taking up a franchising opportunity such as Macdonalds for instance, means that the brand is already well known to the public; as a result, any new franchise would have the advantage of attracting customers that have already been subjected to previous promotional efforts from the Company. Since customers are already familiar with the brand name, they are likely to avail of the facilities of the business.

In the absence of a franchise, a new business owner would be faced with the task of making the business a recognizable entity in the marketplace, which would involve time and monies. The second advantage of franchising is related to the above. Advertising can often be one of the most expensive aspects of running a business and pulling in customers, with a franchise, the franchise owner takes care of all the advertising and the franchisee merely has to deal with the customers from its own local area.

Thus, being a franchisee also means that the business name is a recognized one and the new business franchisee would automatically be able to capitalize on a recognizable brand name in the marketplace. Similarly a franchisee would also have access to the reputation that the franchise has. In the event that the franchise has a good