EMBA 530 Innovation and entreprenuership initial post Essay

EMBA 530 Innovation and entreprenuership initial post - Essay Example nchisor’s quality standards; (2) the franchisor (a) has significant control over how the franchisee operates its business, or (b) significantly assists the franchisee in operating its business; and (3) the franchisee is obligated to make a payment or to promise to pay the franchisor to being operating the franchise† (U.S. GPO, 2013). Clearly, franchising is governed by legalities because rights overlap in these types of businesses. The franchisor and the franchisee are limited in their prerogatives – an important consideration in considering whether the franchise is actually an enterprise (MumdÃ… ¾iev & Windsperger, 2011). There are pros and cons to a positive answer. Entrepreneurs should be able to assess their environment and determine marketing strategies including determining product design, pricing strategy, distribution and promotion, also finance and production methods – capabilities which in a franchise are often stipulated by the franchisor. On the other hand, it may be argued that the franchisee is an entrepreneur because he risks his own capital and actually runs the business (unlike a mere investor), and also strategizes in terms of place because it is often the franchisee who chooses the venue and provides the physical facilities. It may be argued in this case that the franchisee still did the strategic choices when he chose one particular franchisor in a pool of many other alternatives. As a legal entity created by mutual assent, the nature of the franchise is determined largely by the specific contract entered into by the franchisor and the franchisee. The franchisor may be relatively liberal, i.e. letting the franchisee determine the product offerings like McDonald’s did in India where people do not eat beef, or the contract may be very specific such as McDonald’s franchises within the U.S. Ketchen, Short & Combs (2011) have asked the same question distinguishing enterprise from franchise, and instead of giving a straightforward