Franchising

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En provenance du cours de University of Maryland, College Park

Master Class for Corporate Entrepreneurs

13 notes

University of Maryland, College Park

Master Class for Corporate Entrepreneurs

13 notes

Cours 5 sur 5 dans Specialization Corporate Entrepreneurship: Innovating within Corporations

The Master Class experience is designed to serve as the final project experience for the Corporate Entrepreneurship Specialization. Alternatively, professionals with experience in opportunity analysis, business modeling, and corporate finance are invited to complete the Master Class experience without the preliminary courses. With maturing technologies and aging product portfolios requiring established companies to create, develop, and sustain innovative new businesses, graduates of the Master Class will develop an understanding of how to create new businesses and initiatives within the corporate environment. In collaboration with our award-winning faculty, and a vibrant peer group, learners will explore and apply the skills, tools, and best practices for: • Identifying and developing the entrepreneurial opportunities; • Building business models; • Creating strategies for leading innovation; and • Financing and profiting from innovation. The Master Class experience is differentiated from typical Coursera courses and MOOCs in that our faculty and staff are actively engaged with learners by providing individual feedback on assignments. Our faculty and staff will review and offer feedback on the major assignment submissions, if you wish, in an effort to assist you in developing and launching your corporate ventures. Try this course for FREE at https://www.coursera.org/learn/corporate-entrepreneurship-project

À partir de la leçon

Building the Proposal

This module improves your understanding of how to secure and manage funding for your corporate venture. We will demystify key accounting and financing concepts to give corporate entrepreneurs a guide to developing the business case for their ideas, and securing funding to translate ideas into reality.

Sources of funding8:40

Internal funding3:27

Customer and vendor financing3:27

Franchising4:12

Joint ventures8:40

Co-branding6:32

Licensing agreements6:04

Rencontrer les enseignants

Dr. James V. Green
Director of Entrepreneurship Education
Maryland Technology Enterprise Institute

Okay, we've been talking about alternative sources of financing, and

so now we'll talk about franchising.

But before I get into this topic of franchising,

let's refresh ourselves on the concepts of alternative financing.

Traditionally, as a corporate entrepreneur you're going to be looking for

internal funds.

That involves competing for capital expenditure budgets or operating budgets.

CapEx budgets have a direct impact on return on capital employed.

And so, alternative financing sources are good to look for if you're looking for

financing for your project.

These alternative strategies are beneficial because they are using,

as I call it, other people's money, instead of the corporate funds.

And so it can enhance the business model through new revenue streams and

profits centers.

So there's a lot of different ways that you can accomplish this.

You can leverage your intangible assets such as intellectual property and

trademarks, and know-how, and trade secrets.

And you can also develop the strategic relationships.

So let's look at franchising now as a source.

Franchising basically shifts the financial responsibility away

from the corporation and to the franchisee.

And for the franchisee, general, it will pay for

the right to use your intellectual property, your trademarks, and

probably your systems if you have systems established.

And they'll do that in exchange for this franchise fee plus a continuing

royalty on the product or service that you're actually selling to the franchisee.

And over time, this can go to a substantial value.

And the best example of that is an organization like McDonald's.

The elements of the franchise include, there are several elements, right?

Number one is brand.

And the franchisee is able to ride on the laws of your brand and

creates a degree of customer loyalty and builds brand equity.

They also connects us to this systems and process, meaning,

that helps to maintain the relationships that you have already

established with your customers and also helps to build loyalty.

And then you as a franchisor, have to support the franchisee by providing

them tools, and training, and tips on how to expand their offerings,

and provide a way for them to grow their business.

So why would we look at franchising as a way of financing the project?

Well, there's economies of scale and there's operating efficiency.

If you think about the fact that, you're basically the franchisee,

is actually using the system that you've already built and established.

And they're accessing them just so there's kind of an economies of scale in that way.

I call it, kind of look at it similar to the way you look at like,

if you rolled up a bunch of operations.

And the need, that you do not need to repeat or

duplicate all of these selling and general administrative

cost of the corporation at each franchise level.

It also enables you to kind of rapidly penetrate the market by having

a bunch of different franchisees out there at fairly low cost.

You can get some consumer reach.

You can co-market with your franchisee and

you're basically replacing the need for internal people with owner-operators and

in many organizations, head count's a big expense and

also is very difficult sometimes to get additional head count approved.

And again, as I said, you're shifting the financial responsibilities and

a lot of risk away from the corporation to the franchisee.

So they're good to look at, they're not for every project but

it's something you should remember is available, and if your project makes sense

from the franchise standpoint, then you could pursue it.

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