The primary reason mentioned by Paul in the case study for initiating the business as a partnership franchise was due to the financial reward that he would attain in terms of equity and profitability. In the future Paul also seeks to increase his profit share and stake in the business to 49 percent which would provide him with access to higher rewards on the performance of the franchise business in the market. However there is a slight problem with the figures states by Paul. Essentially, forecasting performance of a franchise business is not an exact science, and often franchisees can overestimate their revenues while underestimating the costs.
“While it comes as a surprise to many, finding out how much a franchisee can earn is much more difficult than it seems. Indeed, simply calling in for a quote is virtually impossible today, given that a large portion of the franchise companies are extremely reluctant to disclose figures on a potential franchisee’s earnings and possible rates of return.” (‘Assessing Franchise Profitability’, p1)
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