Talk:Franchising

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Notes[edit]

Contrary to what might be expected, there is no federal registry of franchising or any federal filing requirements for information. Instead, states primarily collect data on franchising companies and enforce laws and regulations regarding their spread.

I'm not sure I understand why this would be contrary to expectations. --Brion 05:51 9 Jun 2003 (UTC)

-- I dont know what the original writer of this article had in mind by "contrary to what might be expected", but I personally would expect the overseeing of franchises to be at the national level rather than the state level. Almost all franchises are national. To oversee them at the state level would entail incredible duplication of effort, inefficiencies, and wastefulness. user:mydogategodshat

"Contrary to what might be expected" may be a WARNING that the Federal Rule governing franchising wherein the FTC advises the new buyer in the front of the mandated disclosure circular that they are requiring the franchisor to give you the information "TO PROTECT YOU" is less than accurate. The FTC Rule on Franchising acts to protect the franchisors more than the franchisees because there is a serious flaw in the FTC Rule. See and read "Franchising Fraud: the continuing need for reform" published by the American Business Law Journal, 01 Jan 2003, available on a Google Search, for a dissertation on "Inducement" problems in franchising. CJKC 29 June 2009 —Preceding unsigned comment added by 69.76.198.50 (talk) 16:38, 29 June 2009 (UTC) -- Franchising is most certainly regulated at the state level. The only real involvement that the FTC has is to regulate the disclosure documents. But even then, those documents are not reviewed by the FTC. —Preceding unsigned comment added by 72.81.71.103 (talk) 02:02, 27 January 2010 (UTC)

How about a list of Franchises?

French Derivation of Franchise?[edit]

Last time I checked, the french work for "free" was "libre"... Anybody care to explain? --MK

You probably just didn't check hard enough... See e.g. [1] -- Naphra

Bold text--203.177.228.44 09:08, 26 September 2006 (UTC) libre is spanish term for free...dont yah know it?! or u dont get it?!!

Franchise comes from Old French franchise, from franche, feminine of franc, meaning "free" or "exempt" -- Source: The American Heritage Dictionary of the English Language, Fourth Edition copyright ©2000 by Houghton Mifflin Company. CZmarlin 18:57, 13 October 2006 (UTC)

Franchises can be small businesses, too![edit]

As an employee of a family-owned and -operated franchise, I disagree with people denigrating franchised businesses on the grounds that it's putting "independent" and/or "locally-owned" establishments out of business. Our franchised business puts more money directly into our community than any so-called independently-owned local competitor. (My establishment works in the tourism industry, so we're actually capturing several million dollars of revenue from out-of-town tourists and funneling it directly into the local market with the exception of our 3% franchise fee and the goods we must purchase from out of state.) In fact, most of our direct, franchised competitors are owned by local businessmen. Only one of our competitors is corporately owned, and none of the franchises is owned by out-of-town corporations.

Same goes for several other franchises in our town, like restaurants. I think McDonald's has three separate franchise agreements in town (with 15 restaurants), and all three are owned by local families. Our Taco Bell franchisee is a local businessman, and so is Subway. Chili's (with the exception of the one in the airport terminal) is locally owned, as are the three new Carl's Jrs. These local franchise owners contribute hundreds of thousands of dollars to our local economy and provide large gifts to local non-profit organizations. Yes, the cost of the supplies and franchise fees goes out of state (such as the Taco Bell condiments, which I know are trucked in from out of state), but the profits and employee's wages stay right here in town.

So, perhaps in other areas, franchises are owned by conglomerate corporations that funnel money to well-to-dos in high rises on the opposite coast, but franchises can just as easily be locally-owned, huge supporters of the community.


This article doesn't denigrate franchising but tells the truth. Franchising of retail businesses to the extent we see today is a somewhat new business model that does provide cheap labor and cheap venture capital for franchisors, who can maximize their profits because they avoid the expense and risk of building and managing the physical units that bear their brand names. The franchisor minimizes his risk and maximizes his profits because he takes his profits off of the gross sales of the franchisee whether or not the franchisee is operating in the red or in the black, and whether or not there are ever any profits over and beyond overhead for the franchisee.

It is true that the local owners of franchisees DO contribute to the local economies but the point is that retail franchisors, under current Regulation and Rule, do not have to provide historical UNIT FINANCIAL PERFORMANCE statistics to new buyers of their franchises and they don't. Therefore, franchisors CAN sell new franchises without disclosing the risk factors of unit profitability and success/failure to new buyers. If the concept is going down hill or if the saturation of the concept is great, or if the profitability on a unit basis is low, the franchisor can still remain viable as long as he can sell new franchises out the front door and abet the fire sale of discounted failed or failing units out of the back door. This process is called "Churning" and is abetted by ineffective government regulation of the franchisor. The result is that many prospective franchisees unknowingly buy very high risk and low profitability franchises and build new units for the franchisor. When the franchisee fails to thrive within the estimated startup costs and, when the franchisee loses the entire investment and has to give their franchised business away or close it down, or declare bankruptcy, whatever, they have no recourse in the Courts against the franchisor because he has made sure that he didn't promise them anything to begin with in writing within the franchise agreement and, apparently, under law, the franchisor doesn't have to disclose the risk, as known to him, to the new franchisee. Really "dirty pool" and very hard on Mom and Pop franchisees who lose their shirts. CJKC 1 May 2009 —Preceding unsigned comment added by 69.76.198.50 (talk) 17:48, 1 July 2009 (UTC)

I was going to recommend rewording this in this article, but when I reread the article to suggest a rewording, I realized I misread it the first time. Still, there's a slight sound of anti-franchise bias in this statement: "Many retail sectors, particularly in the United States, are now dominated by franchising to the point where independently-run operations are the exception rather than the rule." So, ignore everything I just said...? :-)

cluth 08:27, 7 December 2005 (UTC)

About the origin of 'Franchise'[edit]

The origin of Franchise does seem to be old French. This page http://www.etymonline.com/index.php?search=franchise&searchmode=none gives the following etymology: "c.1290, from O.Fr. franchise "freedom," from variant stem of franc "free" (see frank). Sense narrowed 18c. to "particular legal privilege," then "right to vote" (1790). Meaning "authorization by a company to sell its products or services" is from 1959". Another page http://www.franinfo.com/history.html provides a longer history of the evolution of the concept. There too, it mentions the original meaning to be 'privilege or freedom'. Priyatu 07:38, 23 January 2006 (UTC)

That's pretty much it, though franc still exists with the same meaning in Modern French, notably in the term franc-maçon, 'freemason'. -- Blisco 09:07, 8 June 2006 (UTC)

I removed the following from the entry: "from the [[French language|French]] ''franchir'': '''vt''' to clear an obstacle or difficulty)<ref>"Harrap's shorter French and English dictionary" ISBN 0-245-55046-1</ref>". The origin of the word is very clearly "franchise" in the sense of freedom and this is not reflected in the paragraph I removed. Rdavout (talk) 03:17, 17 June 2008 (UTC)

I've yet to see any strong reference from a WP:RS for the etymology that could distinguish which stem-word's meaning was behind the application of the word to the modern commercial concept. Certainly there are lots of unreliable websites with a POV to push, usually ones (like the franinfo above) trying to sell franchises or consulting services. Not good enough.LeadSongDog (talk) 13:36, 20 June 2008 (UTC)

External linkspam[edit]

Let me explain why I deleted the Blue MauMau "Franchipedia" link before. It appears to be run in the manner of a blog. WP:EL notes that blogs are to be avoided unless the subject of the article is a blog or the blog has been carefully reviewed. I'm not familiar with bluemaumau or Franchipedia--is the wiki itself not part of the blog? The style is confusing, so it's hard to determine what's the blog and what's not. The articles seem to be less of a wiki and more of a blog from what I've read (no citations of information, articles include blog-like "trackback" feature, comments section, member-rating of article system--all the signs of a blog). Before I pass judgement again and remove the link, I'd like to hear anyone else's thoughts on this external link, since it's a little more murky than, say, any of the other external links I've removed. Thanks! Rkitko 06:13, 7 August 2006 (UTC)

Edit: Some of the articles on the site are also copies with slight modifications on the wikipedia articles with the same name. For example, see Howard Johnson's and Blue MauMau's Howard Johnson's article. An external link that doesn't add much new content besides what's already on Wikipedia isn't of much value, in my humble opinion (Wikipedia policy prefers internal wiki links over external links). Any thoughts? Rkitko 06:20, 7 August 2006 (UTC)
After looking through some of the site, I agree it's somewhere in the gray area between "obvious spam" and "authoritative resource". It looks like a combination of a blogging system and a wiki. Since the site has other relevant information in addition to blogs, Wikipedia's general guideline to avoid links to blogs doesn't necessarily apply. It looks like there's a small amount of original material (e.g. [2]) in addition to that copied from Wikipedia.
However, there are a few reasons why the link should arguably be removed. Within the article,
Blue MauMau's Franchipedia Project has an audio interview with Kentucky Fried Chicken's first franchisee, Harman's Cafe of 1952 that gives an insight....
sounds like a classic example of an attempt to promote a website. And as you say, there's just not much there that Wikipedia doesn't already provide. Furthermore, it's not a good idea to include a link based on promises of future improvement ("currently documenting franchise history one company at a time"), since Wikipedia is not a vehicle for promoting new websites. Thus I think we should remove the link for now, but revisit the decision as the site matures. Wmahan. 05:31, 9 August 2006 (UTC)

RESPONSE: The audio file of an interview with one of the first modern franchises is incredibly interesting from a historical business perspective. I wish there were podcasts about the A&W business model of 1919 but there isn't. (I understand Blue MauMau is working on it.) Harman's KFC Cafe is one of the earliest recorded franchise models that we have on the Net. It explains how the franchise was organized and different dynamics in the give and take of owners and corporate staff in the early days. The name "Kentucky Fried Chicken" comes from that original franchise owner in Utah, who felt it sounded more exotic and friendlier than Utah Fried Chicken. My vote is to link to the article. But again, this is more of the business of franchising and not so much the consumer perspective of what store and what product came when. Wikipedia should try to link to trade wikipedias because the emphasis will be different. In other words, if a trade group such as doctors want to create a trade wikipedia, it is in wikia's interest to link with such articles and insights. Harry Maeda 05:22, 13 August 2006 (UTC)

Inaccurate information?[edit]

(moved from User talk:Harry Maeda)

There is information on this page that is not entirely correct. I have attempted to change some of the mistakes in franchise early history. It did not start with Howard Johnson's in the 1930s. That is much too late. A&W was considerably earlier, starting in Lodi, CA in 1919. Their owners, Alfred and Walter, stated that they copied the older franchise model of tire companies.

What about Martha Matilda Harper who started a beauty parlor franchise in 1891? (See Wikipedia's own entry on her) 208.81.28.204 (talk) 18:09, 21 October 2013 (UTC)

In regards to hotel franchises in Wales between hotels and bars in the 1850s, this is possible but documents and links would be greatly appreciated to collaborate the claim.

You can find an ongoing project of early franchise history at [the Franchipedia], an online franchise wikipedia project. Your comments there would be much welcome.

This statement is also debatable. "Many retail sectors, particularly in the United States, are now dominated by franchising to the point where independently-run businesses are the exception rather than the rule." An example should be used to substantiate it.

I do not want to declare this page in dispute but would prefer discussing the issues first. —Preceding unsigned comment added by Harry Maeda (talkcontribs) 06:24, 7 August 2006 (UTC)

And my reply to Harry, left on his talk page:
Greetings, Harry. I'm going to move your statements over to Talk:Franchising as that's where I think you meant to place them. Also, don't forget to sign your name on talk pages with four tildas (~~~~). I'd also appreciate your thoughts on what I wrote at Talk:Franchising#External linkspam. Please also remember that you must have sources for your contributions that claim certain facts. Such as your claim that "Franchising dates back to at least the 1850s" -- here above you admit you don't have a source for that claim (print or online). I'm going to also put in the standard wiki welcome, which will give you general links to wikipedia policies and guidelines. Hope all of this helps! If you have any questions, leave a message on my talk page or at Talk:Franchising if it's related to that topic. Thanks! Rkitko 06:31, 7 August 2006 (UTC)
Thanks for the welcome and the link to the Wikipedia guidelines. I will respond shortly. Good to be here. Harry Maeda 13:06, 7 August 2006 (UTC)
We're glad to have you and look forward to a full future of productive edits! I hope you find all of those links helpful. Being a new wikipedian is kind of overwhelming--I haven't even sifted through all of the policies yet. Again, let me know if there's any question I can help answer or direct you to where you might find the answer. Best, --Rkitko 17:39, 7 August 2006 (UTC)

--

Hi. Hope this works. Just to be clear, I did not say that "Franchising dates back to at least the 1850s." That statement already existed in the article. I asked that references be provided. I've not heard that and have several leaders in the Australian franchise scene that have not heard that. It may be true but providing references would be safest. --Harry Maeda 05:08, 13 August 2006 (UTC)

Oh, I apologize for saying you put that statement in! To be honest, I haven't read the whole article. As explained below, I just watch the page because of heavy linkspam activity. More comments below, I just wanted to apologize up here for that. Best, Rkitko 20:05, 13 August 2006 (UTC)

I've read the Wiki rules. (There's quite a few of them!)I'm waiting for anyone else to respond to your comments.

Point 1. Blue MauMau is a social media or community, much like Wikipedia. However, these are not college kids that are copying news materials that already exists on the Net. It isn't MySpace or Blogger. First, it is a vertical community that has tremendous originality. (See the article on Hospitality Experts Say Market Fine.) On Blue MauMau franchise CEOs (see Editors Note to CEO), well-known franchise consultants and experts contribute articles. The comments such franchise insiders make is highly news worthy and informative. The confusion may occur because Blue MauMau has a blog section, where experts write columns.

Point 2. It has an online franchise encyclopedia, the Franchipedia project, where it is trying to jump start from a business perspective the history of franchising in this country. The Franchipedia project in some cases has copied articles from Wikipedia such as the McDonald's entry so that readers can contribute something from something rather than from nothing.

But there are stark differences. The few franchise entries in wikipedia about franchising tend to be consumer oriented, e.g. "Shamrock shake started in 1970". The Franchipedia project wants to comment more on the development of the franchise business model. As more writers contribute, the few articles in Wikipedia and also in Blue MauMau will diverge because perspectives and aim is different. Most importantly, the Franchipedia Project is a trade wikipedia that is open to all. It doesn't just allow one company to gather, edit and publish information like FranData, Franchise Business Review or NewRules.org?? You do not even have to be a member of the Franchipedia community to contribute so it is true to Wiki principles of being open to all.

Blue MauMau is trying to work with Wikipedia. These two communities can help each other with relevent articles. For these reasons and more, my suggestion is that an external link to the Franchipedia project be listed to encourage people to contribute to its body of business knowledge.

Franchising Errors and Gaps: Whoever is contributing to the Wikipedia entry, there are big pieces of franchising that are not quite right or that are missing. There is little mention about the beginnings of modern business format franchising. Until I came last week, you actually wrote the first modern franchise was Howard Johnsons in the 30s. There's no mention of such basic franchise concepts as "churning", "retrofranchising", and much more. An open franchise wikipedia can help Wikipedia get its own facts straight through franchise consultants, experts and CEOs.

Harry Maeda 05:08, 13 August 2006 (UTC)

Retrieved from "http://en.wikipedia.org/wiki/User_talk:Harry_Maeda"

--

I'm gone through this article one more time to find many errors. (1) It describes only business format franchising as "franchising" hence, overview, advantages and disadvantages sections are misleading. (2) Many minor areas that mislead, such as the origins of the word,"Franchising (from the French for free)". That's technically correct but misleading. Reader needs a better understanding of the French word "Frank" from which franchise has been derived. (3) Legal aspect such as major cases impacting business format franchising are missing. Dates and explanations are not correct.

Harry Maeda 17:32, 13 August 2006 (UTC)

Harry, this is excellent that you're locating errors and wish to make this article better! I'm glad someone is finally taking an interest in this topic. I admit I know next to nothing in this realm--I just keep this page and Corporate social responsibility on my watchlist because both tend to have high linkspam (see also: Wikipedia:External links#Links normally to be avoided) activity.
I agree that wikipedia should pay attention to other wikis, and it does (for example, the Star Trek page has a link to the Star Trek wiki). But, like Wmahan said above, it appears that BlueMauMau is somewhere in the grey area between a blog and an authoritative source. In my surfing on that site, I haven't noticed many articles that are using citations of where the information came from. Usually, I try to obtain the original source and cite it instead of a secondary source (like a website citing an academic article). Other guidelines that might be helpful here that you may not have stumbled upon:
Specifically, as you add new information or verify old information, try to use the new "ref" tags, which are explained here. And if you're like me and need to see these tags in action in a real article, I have implemented them in the Triggerplant article--so check that out to see how the wikitext/html works and produces the references. I'll certainly help you with the technical kinks, but since I don't know much about the subject here, I won't be of much help with the text. Hope all of this helps. Let me know if I can answer any questions you have. Cheers, Rkitko 20:01, 13 August 2006 (UTC)

--

You guys are way, way off on this. The entries to the history of franchising and external sources are not from a spambot. They link back to a site that seems to be largely a guild of franchise CEOs, Presidents, VPs and experts yet you call their articles and columns to the industry a personal blog that doesn't meet Wiki standards. (T'aint so, not according to the standards that you cite). The site isn't a single blogger or person trying to promote themselves. It has almost no advertising and it is not a corporation trying to promote itself. The Franchipedia section on the cite is obviously an open, growing, free encyclopedia specializing in a trade. It links to primary sources, which includes original participants in the growth and history of 20th Century franchising who share original stories (such as the KFC first franchisee story), and yet you say that it lacks originality and that it does not cite enough secondary evidence.

This is crazy thinking for building the knowledge of the history of companies and an industry. I guess it has to be done by future students of the next generation who have the time and the technical Internet skills (or whatever it will be then). Apparently if these CEO / authors write it on the Franchipedia now, it doesn't count as far as Wikipedia is concerned. Good luck getting experts. You've turned me off.

Cliff Landon 20:40, 17 August 2006 (UTC)

Sir, I never said the external links were generated by a spambot. Linkspam can be generated by a real person (internally: excess intrawiki linking or externally: linking to a site specifically to promote it). Notice above the ambiguity over the intent for placing the link on this article.
As for verifiability, how can we verify that the content of BlueMauMau is indeed written by these CEOs, VPs, and Presidents? Personally, when I'm citing sources of information, I trust print sources or official websites (most likely official annual reports and the like). I looked again through the site and the only articles I ran through that cited any source at all were the ones copied from Wikipedia. I never said the entries on the Franchipedia lack originality. And from what I've seen, they don't cite any primary, secondary, or even tertiary literature. I admire what they're trying to do over at BlueMauMau, but we can't use them as a verifiable source of information just yet.
One more thing: Wikipedia, mostly, does not rely on "experts," though we have quite a few. A well-researched article can be written by anyone on any topic. For example, I know little about AI and computer technology or fractals, yet I wrote the entry on TechnoSphere, citing primary sources (published personal accounts of the people involved, newspaper articles, peer-reviewed journal articles, etc.). I do wish that, instead of disagreeing with Wikipedia policy and my opinions on this matter, we could move forward and expand this article with accurate information. And please do remember that I am but one Wikipedian--do not judge the entire site by one person's actions or opinions. You can certainly ask an admin to review the situation for you, if you wish. Just place {{helpme}} on your talk page with an explanation and link and they will help out. Best, --Rkitko 01:34, 18 August 2006 (UTC)

--

Rkitko. Yes. I see the article and the nomenclature to reference a work. I'm not much of a programmer. I'm a busy business guy. I'll look at how to do the referencing and Wiki nomenclature a little more though to see if I can grasp it. I might have to leave this to younger folks than me.

Harry 01:25, 18 August 2006 (UTC)

I can certainly help you with the reference "tags". As you add information, just place the reference in parenthesis (at the end of a paragraph or particular statement that came from a specific source) and then I'll run through the article after your contributions and apply the ref tags. Unless, of course, you want the practice at it. Let me know if there's anything else I can do to help :-) Rkitko 01:34, 18 August 2006 (UTC)

The section that lists the various components of the Franchise Agreement confuses the Franchise Agreement with the UFOC. For example, items 2 through 5 are elements of disclosure, not contract.--146.145.125.169 16:59, 30 July 2007 (UTC)

The Legal Aspects section contains inaccurate information about the Franchise Agreement. Specifically, it confuses aspects of franchise disclosure with franchise contract (Sections 4 and 5, "Litigation history" and "Bankruptcy history" are elements of disclosure, and have no place a Franchise Agreement, which is a contact). I do not know how to solve this problem without removing the offending section or retitling it, so I wanted to post my concern first.--146.145.125.131 15:36, 22 August 2007 (UTC)

Go ahead and remove those items from the list which are not normally a part of the franchise contract. If you want, add a paragraph about franchise disclosure, with the normal elements listed separately. Argyriou (talk) 16:29, 23 August 2007 (UTC)
I added a paragraph clarifying the issue as well as a list of common Franchise Agreement points. I also properly retitled the original list as clauses found in a UFOC, not Franchise Agreement. I have researched many franchises for my job, and have read many UFOC's, Franchise Agreements, and other literature pertaining to the topic. As a result, however, I could not think of any authoritative source besides the documents themselves, which isn't practical. Therefore, the new information is still in need of proper sourcing.--146.145.125.131 17:43, 11 September 2007 (UTC)

external link spam?[edit]

The following was recently removed for being external link spam, but the information provided in the posting is accurate as provided and the link to the FRANdata website is just a sitation of reference for the information. FRANdata is an information company which provides plenty of franchising facts to major publications within the franchising world and publishes free newsletters which are full of similar information. I do not see the reason the following information was removed.


FRANdata[1] estimates that on average, 100 documents are distributed per franchisor per year. This represents 200,000 UFOCs distributed each year in the US alone. FRANdata also estimates the cost of each UFOC to be near $100.[2]


—The preceding unsigned comment was added by Frandata (talkcontribs) 15:57, 24 January 2007 (UTC).

Question[edit]

Off the top of my head, I'm recalling a significant change to Franchise Law in the US that occurred in 1938, but I can't find anything in Google searches citing that Law. Anybody have a clue as to what the name of that Act is? If I recall properly, the Senate debate was quite high profile, with all the Mom and Pop's in America claiming Franchising would kill Main Street America. Have Gun, Will Travel 17:57, 7 February 2007 (UTC)

I'd like to dispute this fact:

"Due to the disadvantages such as those listed above, the average success rate of franchisee in the United States in the early 2000's is only around 25%, and the average income of these survivors is only around $30,000.[citation needed]"

Where is this data from? The success rate for franchises is much higher (vs. non-franchise independent businesses), according to this site [3]

According to Franchise World Magazine, a franchise business has a 92% success rate after 5 years compared to a 23% success rate of an independent business after the same period of time.

Note that Schooley Mitchell is trying to sell franchises, and Franchise World is published by the IFA, which has repudiated the success rate claims (normally given as 95%, but in this example as 92%). Notwithstanding the hostility on this site to BlueMauMau's site, BMM does have some articles discussing why it is difficult to give a "success" rate for a franchised location in the first place. Readers who think that franchising somehow reduces inherent business risk are fooling themselves, and should look at the studies by Shane, Bates, and Purvin which demonstrated to the contrary. —Preceding unsigned comment added by 68.237.123.229 (talk) 03:27, 27 December 2007 (UTC)

There is only one Franchise bankruptcy to every 40 independent business bankruptcies in North America (5,000 vs. 200,000 annually, respectively).

Although only 3% of businesses in North America are Franchises, 40% of retail and service business is conducted by those franchises every year.

There are now over 600,000 Franchises with over $600 billion in sales in North America.

Rfein1 21:18, 16 April 2007 (UTC)

Copyvio[edit]

Much of this content is also on ths site. Please addressLeadSongDog (talk) 19:02, 14 December 2007 (UTC)

Do you have specific examples? I couldn't find any.--agr (talk) 20:08, 14 December 2007 (UTC)
Try this search, this search or this search for starters. LeadSongDog (talk) 20:40, 14 December 2007 (UTC)
The site your first search bring up, youshouldfranchise.com, has a copyright date of 2007; the sentence that matches was added to our article on 18 March 2005 by a long term editor. The second search brings up a site that explicitly credits Wikipedia. The third search site has the matching text in a sidebar. Also the fact that the 3 searches bring up different sites strongly suggests to me that it is Wikipedia that is being copied here. I suspect this will be an increasing problem with the type of search you are using. --agr (talk) 21:08, 14 December 2007 (UTC)
I believe that is the case here. I am extremely careful to draft from scratch (see my work at Lawyer and Roger Traynor) and I add far more citations to reliable sources than the vast majority of Wikipedia editors. I have seen a lot of private sites copying Wikipedia content because they figure that they are so small that Wikipedia will not waste its own funds trying to sue them. --Coolcaesar (talk) 03:10, 15 December 2007 (UTC)
For new content, I believe the absence of a CorenSearchBot hit would be reasonable grounds to assume the content isn't on the web. I'm not sure when CSB started up. In this case the absence of citations still leaves the WP:NOR issue.LeadSongDog (talk) 17:15, 15 December 2007 (UTC)


User talk:24.166.188.91[edit]

This anonymous IP editor from Kansas City, Missouri has been assiduously grinding out new and modified prose content in the article, but not providing citations or referencing of any form, despite the need having been clearly explained in the user talk page (no reply seen there). While loathe to do so, I've reverted the changes made. If the edits continue, it appears that there will be no option but to assume it is original research. If this is you, please understand that your contribution of high quality prose would be most welcome, but that verifiability is a core policy for wikipedia that must be maintained. LeadSongDog (talk) 18:08, 21 December 2007 (UTC)

Advantages ---Less Chance of Failure[edit]

This "heading" is misleading in itself. As per the quoted source in this section, even the Internation Franchise Association has disclaimed that franchising is less risky than independent businesses. This is not "neutral" and just misleading. Perhaps, Chances of Failure would be a more accurate heading since there has been no consensus one way or the other on the matter of whether or not franchising is less risky than starting you own business. This subject in itself is a red herring to divert the attention of the buyers of franchises as to the risk of failure, as demonstrated by the performance of the ex-franchisees and the current franchisees of franchise systems.

CJ KC —Preceding unsigned comment added by 24.166.188.91 (talk) 21:17, 22 December 2007 (UTC)

Thanks for starting this discussion. I haven't looked at the article in a while, but it seems like the advantages and disadvantages sections are not sourced at all, and the "LCoF" subsection has a source that's not easily checked. If we can't find sources that meet WP:RS, i.e. not associations, Entreprenuer advertorials, company/consulting websites, etc., then I say we should remove the sections completely. Flowanda | Talk 21:52, 22 December 2007 (UTC)

Thanks! One of the greatest disadvantages of franchising that isn't indicated under the Disadvantages is that franchisees are not promised profits and can stand and must often remain standing at breakeven status the entire duration of the contract with NO profits because under the terms of all franchise agreements, they will lose their investments if they don't pay their royalties and if they don't service their debt, and if they terminate early. Unlike independent businesses, an owner of a franchise can't just negotiate with his Landlord and close up an unprofitable business. Break-even franchises that operate with cheap labor do feed the profits of the franchisors who earn their royalties on gross sales of the business of the franchisee when the franchisee is operating at a LOSS, a PROFIT, or BREAKEVEN. This is a great disadvantage to franchisees who can be indentured in low paying jobs in breakeven businesses for the entire term of the contrac. This is the great advantage for the franchisors who can grow their profits and reduce their risk because it is the franchisee whno puts everything at risk when they build and finance the physical unit that wears the brand name. CJ KC —Preceding unsigned comment added by 24.166.188.91 (talk) 00:42, 23 December 2007 (UTC)

Why does this article contain an "external link" only to the IFA and not to the AFA or the AAFD? CJKC —Preceding unsigned comment added by 24.166.188.91 (talk)

In most cases the answer to questions like that is that nobody's done it yet. Do you have links?LeadSongDog (talk) 19:20, 27 December 2007 (UTC)

I think that some of the advantages of franchising that have been removed should be put back in, but perhaps by clarifying that they are "perceived" advantages of franchising. Whether or not a franchise is verifiably less risky than an independent business is to some extent irrelevant if there is a perception that this is true and this perception influences potential franchisees to buy franchises. There is certainly merit in the article explaining why people by franchises, even if their reasoning if not necessarily correct. For a source for advantages (and disadvantages) of franchising (whether perceived or real), see the Franchise Council of Australia(http://www.franchise.org.au/content/?id=185) or the International Franchise Association's fact sheet (http://www.franchise.org/uploadedFiles/Franchise_Industry/Resources/Education_Foundation/Intro%20to%20Franchising%20Student%20Guide.pdf). These may not be completely independent sources, but they are an authority for what perceptions exist in the franchise industry. Incidentally, the Franchise Council of Australia's annual survey reports, among other things, that only 2% of franchises ceased to operate in 2005 (as opposed to being transferred and that franchisees remained in the system for an average of 7 years (http://www.franchise.org.au/content/?action=getfile&id=450). Jubm (talk) 23:06, 20 May 2008 (UTC)

Can you make a case for using them as a Reliable Source? I can't see how they could be.LeadSongDog (talk) 01:29, 21 May 2008 (UTC)
I have changed LeadSongDog's comment to link to WP:RS instead of to transclude the document. (That is, from curly braces to square brackets.) This may improve the legibility of the page. WhatamIdoing (talk) 03:40, 2 September 2008 (UTC)

The first line that "Franchising is the practice of using another firm's successful business model" has no citation, and is a conclusory beginning which is simply not true to the extent that "success" is required in all countries. For example, in the United States there is no requirement that a business model be "successful" and there are instances of concept franchises, instances of franchises where 70% of franchisees were losing money, et cetera.

For many of the same reasons, the statement that "The franchisor's success depends on the success of the franchisees" is also presented without any supporting authority, and is also false. In most franchises, the franchisor's success depends on (1) the ability to sell new franchises and/or (2) the gross sales of the franchisees. It is not uncommon to have the franchisor do well financially despite franchisees not doing well.

Over the course of time, this article has dropped citations to sources which disagree with the industry groups (IFA/FCA). The resultant bias is unfortunate, though this problem is one which Wikipedia in general has never developed a mechanism to deal with. 24.38.207.134 (talk) 04:04, 16 June 2013 (UTC)

International Coverage[edit]

This article be now girdles the globe and says what franchising can mean and what it cannot. I am no expert. The original article had certain insights and they remain. I have read through all the comments but mine is not the last word on the origin of franchise. There should be somewhere else where the origins of franchise are dealt with. I am rewriting this article with a view to compare it to joint-ventures and strategic alliances (SAs) in Technology Alliances. Most of my adult life has been in teaching technlogy at UNIDO. Most notings here are incorporated in the article except the area of inter-Wiki-ing. Franchising and other ventures are international and people everywhere look at Wikipedia articles as a starting base.We must service them. The Edit Comment of accuracy should be revisedIpsofacto (talk) 10:22, 2 March 2010 (UTC)

While your goal may be admirable, your approach has ignored WP:CITE. If you don't say where you got something you add to a WP article, it will wind up being deleted sooner or later. While I don't doubt that what you've said is correct, that is not remotely good enough. WP:V is a core policy for WP and will be enforced. I'd hate to see all your work to date go to waste, but if you don't provide sources, that is bound to happen.User:LeadSongDog come howl 20:11, 4 March 2010 (UTC)

Difference between franchising and licensing[edit]

This article should be expanded to include a chapter about the difference between franchising and licensing. Perhaps even a separate article about business licensing would be needed. Starbucks, for instance, say that they do not offer franchising but do "sometimes" offer licensing, while their daughter company, Seattl'es Best Coffee, offer franchsing. This "sometimes" licensing actually turns out to be 48% of all Starbucks stores in the world, according to their annual report (pages 2-5).

This is very confusing to anyone not very familiar with business jargon and different business models. After much searching I found this article (Franchise Versus Licensed Business Opportunities) which attempts to explain the difference between franchising and one type of licensing, claiming that licensing is a "light" version of franchising, where you're not as controlled by the brand owner. However, when reading more about the Starbucks model, it seems that their licensing doesn't fit at all with that explanation, as Starbucks maintains a very strict control over its image, probably even stricter than the control McDonald's maintain over its franchisees.

Unfortunately, I don't have the necessary knowledge to write something about this myself, but hopefully someone else has. Thomas Blomberg (talk) 19:13, 19 February 2011 (UTC)

  1. ^ FRANdata Information for the Franchise World
  2. ^ PrivaSign: Complying with FTC Franchise Rule