Critical thinking report

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Critical Thinking Report

“Buy Your First Franchise: Secrets Revealed’

Sandra Hailey

Instructor: Caroline Leffall

November 20, 2020 


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Summary of Article

The article (Alton, 2017), Buy Your First Franchise: Secrets Revealed, is a great

example explaining the main gist of what franchising really is. Since with modern day

technology, there are misinterpretations of reports related to what owning a franchise

really means along with the responsibilities that come along with it.

Alton (2017) begins by providing the definition of a franchise. Alton refers to it as

follows: “Franchising is simply a method for expanding a business and distributing goods and

services through a licensed relationship” (p. 1). He then goes on and tells us that there are two

different main types of franchises which include business format, which is where franchisor

provides the franchisee with everything they need — including the brand name, products and

services, and the entire operating system. The second type of format is traditional franchising

(also known as product distribution franchising). Under this format, the focus is entirely on the

products manufactured or supplied by the franchisor for the franchisee.

Franchising also offers very constant trends for a steady growth, but this is not the only

perk for owning your own business. From statistics shown, ninety percent of franchisers enjoy

running their business and eighty-five percent feel positive of the affiliation to its organization

(Alton, 2017). To show that not only are franchises greatly profitable, but they also leave you

with a sense of pride and satisfaction.

Conclusions

Alton (2017) discusses precise tips on potentially owning your own franchise. A point

included assessing yourself to see if you are in the right position to take on the task including the

technology that is necessary as well as the environment that you live in, which then leads to the

starting cost to see if you have the financials to help get you started and running. Additionally,

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Alton advises to be very cautious when you are looking into purchasing a franchise because of

frauds and manipulation in the process, and strongly encourages one to obtain an attorney for

law help as well as assistance in going through Financial Disclosure Document (FDD) to make

sure to expose all hidden costs to illuminate possible surprise fees and accidents. The last main

advice that he gave is to listen to past franchisers and learn from their experiences and take

advice, and from that, apply it to your own works (Alton, 2017).

How the Article Applies to Chapter Concepts

The article (Alton, 2017) strongly relates to chapter 5 of Understanding Business

(Nickels, McHugh, & McHugh, 2019) regarding the formation of a business. Nickels,

McHugh, and McHugh (2019) strongly emphasizes the advantages and disadvantages of

owning a franchise and the role of technology in the success of the business. Nickels,

McHugh, and McHugh (2019) further describes the body of franchises in the global

market.

Why I Selected This Article?

I chose this article because for starters who may be interested in looking more into

owning a franchise, it gives the main idea, clarifies some clouds or misconceptions that some

certain people may have, and the pros and cons of a business and strategies that are needed.

Two Most Important Things Learned from this Article Reading

The two most important things that I learned from this reading are that franchises have a

higher success rate as compared to someone starting their own company, and that a majority of

franchisees enjoy running it and they would recommend it for others to do.

Quote or Phrase from the Article to Remember

A quote from the article that I would like to remember is “franchises are successful for a

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reason: They find ambitious entrepreneurs who are willing to use a proven and repeatable

formula to grow a business that’s mutually beneficial to all parties involved” (Alton, 2017, p. 2).

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References

Alton, L. (2017, October 9). Buy your first franchise: Secrets revealed. Retrieved from

https://smallbiztrends.com/2017/10/tips-for-buying-a-franchise.html

Nickels, W.G., McHugh, J.M., & McHugh, S.M. (2019). Understanding Business. (12 th

ed.).

McGraw-Hill/Irwin.