BUS 357 International Business
November 16, 2014
Sarah N. Hanbury
Global Delights is such a simple name that brings on a variety of thoughts. The most basic of which, if it’s a store, what do they sell? Global Delights prides itself in the ability to sell candies, snacks, and delicacies from all over the world. Japanese, Chilean, and Australian delicacies can all be found under one roof. They believe in building a trust with their customers, remaining loyal to companies they import from and faithfully exporting goods that they sell online via their business’s website. There are several locations spread out in the northeastern part of the United States, and recently there has been a desire from a few individuals to franchise into Canadian territories. Although Global Delights does have a current website and can ship internationally they have agreed to franchise to an individual in Toronto, Canada.
As stated previously, Global Delight prides itself in the deliverance of international goodies for local consumers. They believe in building a trusting relationship with their customers, remaining loyal to companies they import their delights from, and faithfully exporting ordered goods. Global Delights believes that not only are their customers and products important, but that fair and ethical treatment of their employees is just as important.
Due to the fact that Global Delights has never entered into a franchise agreement in any way, they have researched several successful organizations and the terms in which they use, being as they appear to be standard across the board, they will only mention one. Global delights will be offering international franchising opportunities through a Master Franchisee Development model. Under a master franchise agreement, a franchisor grants a “master franchisee” a territory within which to sub-franchise to third parties (Weinberg, 2014). Although this structure can result in a certain loss of control for a franchisor, is beneficial to a franchisor because the master franchisee can act as a local, self-sufficient party who organizes franchise recruitment, site selection, construction, and operational support (Weinberg, 2014). The franchising fee will have a royalty fee of 6% of gross sales paid on a monthly basis by electronic wire transfer, checks, money orders, or card transactions will not be acceptable.
The total Initial Franchise Fee for each location is $60,000 (Johnny Rockets, 2014). This fee is due upon the execution of the Franchise Agreement. Global Delights requires for potential franchisees to have between $100,000-205,000 in cash assets.
Advertising is an important piece to any business. Being as the new venture will need to purchase the same marketing materials as current stores, a percentage of 2.5% will be required to send in with you 6% royalty payments. This means that a total of 8.5% will be sent by electronic wire transfer to the headquarters of Global Delights monthly.
So that the franchisee knows what they will be getting in return, Global Delights will be assisting by sending in a management team. This team will assist in training of management, employees, marketing procedures such as point of sales materials and access to current manufacturers that Global Delights currently utilizes. These manufacturers will be the only imports that the franchisee is allowed to utilize. This can only change if and when Global Delights agrees in writing and including an amendment in the franchise agreement contract.
Once the franchise agreements have been signed, it’s time to get the ball rolling! Global Delights welcomes their new franchise and immediately assists them so as to insure the success of the business venture for both parties. Global delights will be utilizing the following strategy which is summarized as follows:
(1) Develop an infrastructure before putting in shops…