Introduction
Sufficient amount of discussion and debate is found among the major difference between a franchisee or franchisor and the answers relating to both these aspects are still pending and need to be reviewed further . By definition, a franchisee is a party which comes under the ambit of a franchising agreement and has the right to use the trademark of a business. Apart from the trademarks, a franchisee could also use in the association of brands, proprietary knowledge merely in order to open a branch. A franchisee is liable to pay annual or upfront fees to the party who owns the franchise. The other party who engages with a franchisee in having the annual fees is known as a “Franchisor”
Franchisor is the real owner of the business, who gives the right to the franchisee to use their brand name on their behalf and sell out the products accordingly . A franchisor is the one who provides all sorts of information and knowledge to the franchisee regarding how a franchisee should contribute to enhance the productivity of the parent company in total. .
The main objective of this assignment is to conduct a thorough and comprehensive analysis of a franchisor and a franchisee and then analyze the difference between them along with the advantages and challenges in both of the scenarios. This particular analysis has been done on Tommy Hilfiger and Murjani Group of India, in which Tommy Hilfiger is the franchisor and Murjani Group is a Franchisee. Murjani Group is selling the products of Tommy Hilfiger in India with the rights given specifically by the Company. Interview session has been conducted from the franchisee first, and then from the franchisor.
What is the Mission or Vision of Your Franchise?
Mission and Vision are some important aspects, which certainly give a detailed idea regarding the short and long term objectives of a company . These objectives could be financial or non financial as well. The main reason behind asking this particular question from the management of Murjani Group is to get the information regarding their intention that what the company is wishing to achieve in both short and long term time period.
When asked from the franchisee regarding the mission and vision of the franchise of Murjani Group of India, the management officials stated that the foremost mission of the company is to become an up-market retailer with their outlets throughout India, from where we can sell the most trendy and dominating brands with a focus on Tommy Hilfiger.
What Type of Franchise you own?
It is important for a researcher to a have a thorough knowledge regarding the business of a franchise and in what products or services, it is dealing . This particular question was extremely vital to ask from the franchisee as it certainly gives insight knowledge about the franchise they own. Murjani management emphasized on the gap that existed in the local market for International brands as far as garments and clothing is concerned, and that they viewed this as an opportunity to buy rights to represent a global brand like Tommy Hilfiger focusing on their clothing line.
How long you have been in the business?
This particular question was asked merely to get a fair idea on the number of years since the company has been in the market, and what sort of brand identity they have before their consumers .
In replying to this question, the management official of Murjani Group smiled and said that we are in this business from number of years, and we have number of brands of Tommy. Our consumers have confidence on our authenticity and on the brands we are representing; they they know that Murjani means the real Tommy Hilfiger.
Are the fees or Commission have been distributed fairly?
Inevitably, every organization strives hard for economic prosperity and it is extremely important for the franchisee and franchisor to distribute the commission and fees fairly, therefore, it was important to ask the same question to the management official of Murjani Group.
Murjani Group’ management officials revealed that Murjani Group is one of the largest retail store chain of India and operates with complete ethics and efficiency, therefore all of the matters of fees and commission has been dealt with strict confidence and fairly as well. The fees involved the right to represent Tommy Hilfiger as a brand in the Indian market which is the franchise fee, with complete marketing and operational support which can be refferd to as the royalty.
What sort of regulations and norms you have to adhere with?
Regulations and norms are some of the basic things which organizations have to comply with in order to retain effective in the industry . Keeping in view the importance of this question, the same was enquired from Murjani Group officials about the sort of regulations and norms which they have to comply with in selling the products and inspiration of Tommy Hilfiger.
According to the management official of Murjani Group, taking care of the international brand as far as increasing its brand awareness and image is concerned in front of the consumers is important. They said that they are effectively and comprehensively complying with the local regulations that needed compliance while representing an international brand, which is one of the dominating reasons behind their success. There are two important regulators which Murjani Groups have to comply with which include Advertising Standard of India and local registration with the Security and Exchange Commission of India, in which all the international brands need to be registered before commencing local operations.
Are you satisfied with the relationship you have with your franchisors?
This is the most important question to be asked from a franchisee, because having fiduciary relationship between a franchisee and franchisor is a key in having longer and strong relationship .
Tommy Hilfiger is one of the largest clothing and Apparel Company of the world, who takes great care of their retailers and franchisees as well, revealed by one of the management officials of Murjani Group during the interview. They provide all sorts of knowledge and information to us regarding all of their products, and we are extremely happy to work with them in longer terms.
Interview Analysis with the Franchisor
What is your mission and vision from a franchisor’s point of view?
This question has been asked from the franchisor in order to gain the knowledge and information regarding their intentions of giving a franchise, which can sell out their products in different markets of the world specifically India
Tommy Hilfiger is the franchisor in this particular assignment, and it is found from the answers of the management officials of the company, that there mission from the perspective of a franchisor is to enhance their brand presence globally, while there mission is to increase their business volumes by tapping unexplored markets where consumers have the buying power to purchase their branded clothing and apparel items.
Are the fees or Commission have been distributed fairly?
Tommy Hilfiger is a big name in the clothing and apparel industry of the world and the company has numerous franchises in all over the world, which engages with the company and manages their operations locally in various parts of the world. This particular question is asked from the management officials of Tommy Hilfiger to analyze that whether or not, there is a fair dealing in their venture with Murjani Group of India.
In replying to this question, the management official of the company said that we have a wonderful experience in working with Murjani Group. Having a strong investment portfolio in India Murjani group expressed interest in representing Tommy Hilfiger which seemed a good proposition for them. Furthermore Murjani group had agreed to the franchise and royalty fees as suggested by Tommy Hilfiger management with little negotiation and it was undoubtedly a profitable venture as far as the Tommy Hilfiger management is concerned.
Are you satisfied with the relationship you have with your franchisee?
Asking this question from the franchisor is important because, it is important to analyze the relationship among the franchisee and franchisor in order to be in the business for a long span of time. According to the Tommy Hilfiger management, the most important binding factor between two parties doing business together is Trust. According to them they have a perfect and strong relationship with their franchisee “Murjani Group” and they are trying hard to foster the same for the mutual benefit of both the parties.
Is your Franchisee adheres with your set regulations?
Regulations are important for an organization and it is equally beneficial for a franchisee and franchisor as well, that is why this particular question has been asked from the management official of Tommy Hilfiger. In replying to this particular question, management official of the company said that Murjani Group is an ethical company and adheres with all sort of business based regulations, set specifically by Tommy Hilfiger to enhance their business in different parts of the world.
Conclusion
Though the roles of both the parties in a Franchising agreement differ from each other however with mutual trust as the binding factor it is evident that both of them are working for mutual benefit. On one end where Tommy Hilfiger sacrificed to some extent on the Franchise fee, they are happy with the way their brand has progressed in the untapped Indian market. On the other hand the franchisee, Murjani group is proud to represent a global brand even though it came at a cost, but they are optimistic about the way business has been progressing.
References
Keup, E. (2012). Franchise Bible: How to Buy a Franchise Or Franchise. Chicago: Saga Publications.
Mendelsohn, M. (2004). The Guide to Franchising. Chicago: Adventure Work Press.
Michael Seid, . T. (2007). Franchising For Dummies. New York: Pearson Group.
Stephen Spinelli, . R. (2004). Franchising: Pathway to Wealth Creation. New York: McGraw Hill Publications.
Swart, N. (2004). Starting Or Buying Your Own Business Or a Franchise. Sydney: McGraw Hill.
