Franchising in the context of Smooth Radio (2014)


Franchising in the context of Smooth Radio (2014)

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⭐ Core Definition: Franchising

Franchising is a business practice where a company licenses its business model to another company, or more precisely, where the franchisor licenses some or all of its knowhow, procedures, intellectual property and other rights to sell its branded products and services to a franchisee. In return, the franchisee pays certain fees and agrees to comply with certain obligations, typically set out in a franchise agreement.

The word franchise is of "Anglo-French" derivation - from franc, meaning "free" and it is used both as a noun and as a transitive verb.For the franchisor, use of a franchise system is an alternative business growth strategy, compared to expansion through corporate owned outlets or "chain stores". Adopting a franchise system business growth strategy for the sale and distribution of goods and services minimizes the franchisor's capital investment and liability risk.

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Franchising in the context of McDonald's

McDonald's Corporation, doing business as McDonald's, is an American multinational fast food restaurant chain. As of 2024, it is the second-largest by number of locations in the world, behind the Chinese chain Mixue Ice Cream & Tea.

Brothers Richard and Maurice McDonald founded McDonald's in San Bernardino, California, in 1940 as a hamburger stand. They soon franchised the company. The Golden Arches logo was introduced in 1953. In 1955, the businessman Ray Kroc joined McDonald's as a franchise agent; he bought the company in 1961. In the years since, it has expanded internationally. Today, McDonald's has more than 40,000 restaurant locations worldwide, with around one-quarter in the US.

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Franchising in the context of KFC

KFC Corporation, doing business as KFC (an abbreviation of Kentucky Fried Chicken), is an American multinational fast food restaurant chain specializing in Southern fried chicken and chicken sandwiches. Headquartered in Louisville, Kentucky, it is the world's second-largest restaurant chain (as measured by sales) after McDonald's, with over 31,980 locations globally in 150 countries, as of September 2025. The chain is a subsidiary of Yum! Brands, a restaurant company that also owns the Pizza Hut and Taco Bell chains.

KFC was founded by Colonel Harland Sanders (1890–1980), an entrepreneur who began selling fried chicken from his roadside restaurant in Corbin, Kentucky, during the Great Depression. Sanders identified the potential of the restaurant-franchising concept, and the first "Kentucky Fried Chicken" franchise opened in South Salt Lake, Utah, in 1952. KFC popularized chicken in the fast-food industry, diversifying the market by challenging the established dominance of the hamburger. By branding himself as "Colonel Sanders", Harland became a prominent figure of American cultural history, and his image remains widely used in KFC advertising to this day. However, the company's rapid expansion overwhelmed the aging Sanders, and he sold it to a group of investors led by John Y. Brown Jr. and Jack C. Massey in 1964.

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Franchising in the context of Royalties

A royalty payment is a payment made by one party to another that owns a particular asset, for the right to ongoing use of that asset. Royalties are typically agreed upon as a percentage of gross or net revenues derived from the use of an asset or a fixed price per unit sold of an item of such, but there are also other modes and metrics of compensation. A royalty interest is the right to collect a stream of future royalty payments.

A license agreement defines the terms under which a resource or property are licensed by one party ( party means the periphery behind it) to another, either without restriction or subject to a limitation on term, business or geographic territory, type of product, etc. License agreements can be regulated, particularly where a government is the resource owner, or they can be private contracts that follow a general structure. However, certain types of franchise agreements have comparable provisions.

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Franchising in the context of Ray Kroc

Raymond Albert Kroc (October 5, 1902 – January 14, 1984) was an American businessman who was instrumental in turning McDonald's into the most successful global fast food corporation by revenue. He purchased it from the McDonald Brothers in 1961, after several years as their franchising agent, and served as the leader of the company until his death.

Kroc was born in Oak Park, Illinois, and worked a variety of jobs, including as a paper cup salesman and a musician, before eventually becoming a milkshake mixer salesman. In 1954, he visited a hamburger restaurant in San Bernardino, California, owned by Richard and Maurice McDonald. Kroc was impressed with the efficiency and speed of the restaurant's operations, and he convinced the brothers to allow him to franchise the concept.

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Franchising in the context of Stripper

A stripper or exotic dancer is a person whose occupation involves performing striptease in a public adult entertainment venue such as a strip club. At times, a stripper may be hired to perform at private events.

Modern forms of stripping minimize the interaction of strippers with customers, reducing the importance of the tease in the performance in favor of speed of undress (the strip). Not all strippers are comfortable dancing topless or fully nude, but in general, full nudity is common where not prohibited by law. The integration of the burlesque pole as a frequently used prop has shifted the emphasis in the performance toward a more acrobatic, explicit form of expression compared to the slow-developing burlesque style. Most strippers work in strip clubs. A house dancer works for a particular club or franchise, while a feature dancer typically has her own celebrity, touring a club circuit and making appearances. Strippers are often not direct employees of clubs but instead perform as independent contractors.

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Franchising in the context of Coffeehouse

A coffeehouse, coffee shop, or café (French: [kafe] ), is an establishment that serves various types of coffee drinks like espresso, latte, americano and cappuccino, and other beverages. An espresso bar is a type of coffeehouse that specializes in serving espresso and espresso-based drinks. Some coffeehouses may serve iced coffee among other cold beverages, such as iced tea, as well as other non-caffeinated beverages. A coffeehouse may also serve food, such as light snacks, sandwiches, muffins, cakes, breads, pastries or donuts. Many doughnut shops in Canada and the U.S. serve coffee as an accompaniment to doughnuts, so these can be also classified as coffee shops, although doughnut shop tends to be more casual and serve lower-end fare which also facilitates take-out and drive-through which is popular in those countries, compared to a coffee shop or cafe which provides more gourmet pastries and beverages. In continental Europe, some cafés even serve alcoholic beverages, and it is popular in West Asia to offer a flavored tobacco smoked through a hookah, called shisha in most varieties of Arabic or nargile in Levantine Arabic, Greek, and Turkish.

While café may refer to a coffeehouse, the term "café" can also refer to a diner, British café (also colloquially called a "caff"), "greasy spoon" (a small and inexpensive restaurant), transport café, teahouse or tea room, or other casual eating and drinking place. A coffeehouse may share some of the same characteristics of a bar or restaurant, but it is different from a cafeteria (a canteen-type restaurant without table service). Coffeehouses range from owner-operated small businesses to large multinational corporations. Some coffeehouse chains operate on a franchise business model, with numerous branches across various countries around the world.

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Franchising in the context of Chain store

A chain store or retail chain is a retail outlet in which several locations share a brand, central management and standardized business practices. They have come to dominate many retail markets, dining markets, and service categories in many parts of the world. A franchise retail establishment is one form of a chain store. In 2005, the world's largest retail chain, Walmart, became the world's largest corporation based on gross sales.

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Franchising in the context of Fast-food restaurant

A fast-food restaurant, also known as a quick-service restaurant (QSR) within the industry, is a specific type of restaurant that serves fast-food cuisine and has minimal table service. The food served in fast-food restaurants is typically part of a "meat-sweet diet", offered from a limited menu, cooked in bulk in advance and kept hot, finished and packaged to order, and usually available for take away, though seating may be provided. Fast-food restaurants are typically part of a restaurant chain or franchise operation that provides standardized ingredients and/or partially prepared foods and supplies to each restaurant through controlled supply channels. The term "fast food" was recognized in a dictionary by Merriam–Webster in 1951.

While the first fast-food restaurant in the United States was a White Castle in 1921, fast-food restaurants had been operating elsewhere much earlier, such as the Japanese fast food company Yoshinoya, started in Tokyo in 1899. Today, American-founded fast-food chains such as McDonald's (est. 1940) and KFC (est. 1952) are multinational corporations with outlets across the globe.

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Franchising in the context of Clinical collaboration

Clinical collaboration is the collaboration of organizations, teams of professionals, or small groups of individual professionals, each having skills, equipment or information that will complement what their partner has, all seeking to be more effective. Choosing one's partner is important, and has been described as "similar to the accreditation process of Joint Commission on the Accreditation of Healthcare Organizations." "CHOP Hub For Clinical Collaboration Arrives on the Skyline in University City, West Philadelphia" was a 2020 headline describing a coming 19-story medical building.

While clinical collaboration, which has been described as a "culture" rather than as something to be purchased, is not a "full-asset merger," a clinical collaboration does aid the financial goal of"to maximize the value of" a franchise. It also gives more eyes to aid in reducing risk.

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Franchising in the context of Management contract

A management contract is an arrangement under which operational control of an enterprise is vested by contract in a separate enterprise that performs the necessary managerial functions in return for a fee. Management contracts involve not just selling a method of doing things (as with franchising or licensing) but actually doing them. A management contract can involve a wide range of functions such as technical operation of Design, Procurement, management of personnel, accounting, Construction work, services, and training.

Taking advantage of economies of scale, international reservation systems, and brand awareness, a large number of hotels in Asia run under management contract arrangements. It's common for contracts to span 30 years, with fees as high as 3.5% of total revenues and 6–10% of gross operating profit. Management contracts are also prevalent in the airline industry, particularly when foreign government actions restrict other entry methods. They're often employed in regions lacking local skills to manage projects. As an alternative to foreign direct investment, management contracts entail lower risk and can yield higher returns for the company. The first recorded management contract was initiated by Qantas and Duncan Upton in 1978.

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Franchising in the context of Professional sports league organization

Professional sports leagues are organized in numerous ways. The two most significant types are one that developed in Europe, characterized by a tiered structure using promotion and relegation in order to determine participation in a hierarchy of leagues or divisions, and a North American originated model characterized by its use of franchises, closed memberships, and minor leagues. Both these systems remain most common in their area of origin, although both systems are used worldwide.

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Franchising in the context of Promotion and relegation

Promotion and relegation is used by sports leagues as a process where teams can move up and down among divisions in a league system, based on their performance over a season. Leagues that use promotion and relegation systems are sometimes called open leagues. In a system of promotion and relegation, the best-ranked team(s) in a lower division are promoted to a higher division for the next season, and the worst-ranked team(s) in the higher division are relegated to the lower division for the next season. During the season, teams that are high enough in the league table that they would qualify for promotion are sometimes said to be in the promotion zone, and those at the bottom are in the relegation zone (colloquially the drop zone or facing the drop). These can also involve being in zones where promotion and relegation is not automatic, but subject to a playoff.

An alternate system of league organization, used primarily in Australia, Canada, the Philippines, Singapore, and the United States, is a closed model based on licensing or franchises. This maintains the same teams from year to year, with occasional admission of expansion teams and relocation of existing teams, and with no team movement between the major league and minor leagues. Some competitions, such as the Belgian Pro League in football or the Super League in rugby league, operate hybrid systems which allow for promotion and relegation between divisions but which allocate this based on a mix of financial and administrative scores with competition performance.

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Franchising in the context of Pizza Hut

Pizza Hut, LLC is an American multinational pizza restaurant chain and international franchise founded in 1958 in Wichita, Kansas, by brothers Dan and Frank Carney. The chain, headquartered in Plano, Texas, operates 19,866 restaurants worldwide as of 2023.

While studying at Wichita State University, the Carneys opened their first location, which quickly expanded to six outlets within a year. The brand began franchising in 1959, and its distinctive building style was designed by Chicago architect George Lindstrom in 1963. Pizza Hut experienced significant growth, including the acquisition by PepsiCo in 1977, followed by a spin-off into Tricon Global Restaurants, Inc., later renamed Yum! Brands in 2002, who are the current owners.

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Franchising in the context of Colonel Sanders

Harland David Sanders (September 9, 1890 – December 16, 1980) was an American entrepreneur and founder of fast food chicken restaurant chain Kentucky Fried Chicken, now known as KFC. He later acted as the company's brand ambassador and symbol. His name and image are still symbols of the company today.

Sanders held a number of jobs in his early life, such as steam engine stoker, insurance salesman, and filling station operator. He began selling fried chicken from his roadside restaurant in North Corbin, Kentucky, during the Great Depression. During that time, Sanders developed his "secret recipe" and his patented method of cooking chicken in a pressure fryer. Sanders recognized the potential of the restaurant franchising concept, and the first KFC franchise opened in South Salt Lake, Utah, in 1952. When his original restaurant closed, he devoted himself full-time to franchising his fried chicken throughout the country.

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Franchising in the context of Harvey Norman

Harvey Norman is an Australian multinational retailer of furniture, bedding, computers, communications and consumer electrical products. It mainly operates as a franchise, with the main brand and all company-operated stores owned by ASX-listed Harvey Norman Holdings Limited. As of 2022, there are 304 company-owned and franchised stores in Australia, New Zealand, Europe and South-East Asia operating under the Harvey Norman, Domayne and Joyce Mayne brands in Australia, and under the Harvey Norman brand overseas.

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Franchising in the context of EasyJet Switzerland

EasyJet Switzerland SA (styled as easyJet) is a Swiss low-cost airline based in Meyrin, in the canton of Geneva. It operates scheduled flights as an EasyJet franchisee from Geneva Airport and EuroAirport Basel Mulhouse Freiburg.

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