Food Service/Franchising/And the Fissured Worplace

Food Service/Franchising/And the Fissured Workplace
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Food Service/Franchising/And the Fissured Workplace
One of the significant operational issues that companies face is how to expand and to ensure that they remain profitable. The central approach includes either having new outlets that are maintained and owned by the franchisor (Weil, 2014). The franchisor has ultimate control regarding the expansion, but this leads to new problems since the franchisor has to rely on the capital directly. The second option is allowing the investor to the franchise while relying on the brand to have an established business identity via the name.
Franchising allows a branded company to grow while relying on the capital grained by each franchisee. Weil (2014) reveals that in the fast-food franchise model, the capital finances are obtained as a loan provided by the franchisor to the franchisees. The loan is at a higher interest rate, and it acts as a means for the franchisor to make capital and avoid arbitrage risk. The motel or hotel industry has more capitalization requirements, so the franchises have to rely on o...