Franchises


A franchise is a contract arrangement by which the owner of a trade name, trademark, copyright, or process grants permission to others to use this property in selling goods or services under specified conditions.

The purchaser of a franchise (franchisee) obtains the advantage of offering a well-known or unusual product that may already have wide appeal. The franchisee  also receives the benefit of mass buying and advertising. Typically, the buyer of a franchise may pay a flat fee for the franchise as well as an additional percentage based on sales. The franchisee may also be required to pay a fractional share of the franchisor’s promotional costs and to purchase certain supplies from the franchisor.

Contract and sales laws pertaining to franchises are comparatively new. If the franchise involves the resale of goods or food, both the franchisor and franchisee will usually be liable under a breach of warranty if the food or other merchandize is not wholesome or proper from the consumer’s standpoint. However, tort liability to a third person is usually the responsibility of the franchisee alone. In a case where the franchisee’s truck struck  and negligently injured a pedestrian , the franchisor would normally have no responsibility.

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Carrying out Sales Contests


Sales contests are short-term incentive programs designed to motivate sales personnel to accomplish specific sales objectives. Although contests should not be considered part of the firm’s ongoing compensation plan, they offer sales people the opportunity to gain financial, as well as nonfinancial, rewards. Contest winners often receive prizes in cash or merchandise or travel. Winners also receive nonfinancial rewards in the form of recognition and a sense of accomplishment.

Successful contests require the following:

  • Clearly defined, specific objectives.
  • An exciting theme.
  • Reasonable probability of rewards for all salespeople.
  • Attractive rewards.
  • Promotion and follow-through.

Because contests supplement the firm’s compensation program and are designed to motivate extra effort toward some short-term goal, their objectives should be very specific and clearly defined.

The time in which the contest’s objectives are to be achieved should be relatively short. This ensures the salespeople will maintain their enthusiasm and effort throughout the contest. But the contest should be long enough to allow all members of the sales force to cover their territories at least once and to have a reasonable chance of generating the performance necessary to win. Therefore, the median duration of sales contests is three months.

A sales contest should have an exciting theme to help build enthusiasm among the participants and promote the event. The theme should also be designed to stress the contest’s objectives and appeal to all participants.

My Consultancy–Asif J. Mir – Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please visit www.asifjmir.com, Line of Sight