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Chapter 7. Transaction Analysis

Chapter 7. Transaction Analysis

Transaction analysis, financial analysis, and the dynamics of the franchise relationship are particularly complex issues that need deeper context to make them come to life. Therefore, the next three chapters illustrate the execution realities of developing a franchise operation through several full-length case studies. Each chapter consists of an explanatory note followed by a case study that illustrates the key points of the chapter.

No business succeeds in the long run without competitive advantage, a fact that is especially true in franchising. One of the enticing aspects of franchising is that it enhances competitive advantages as the system grows. In fact, with foresight the franchisor can and should plan the expansion of stores and advantages simultaneously. By that we mean the competitive advantages driving a franchise’s initial success intensify as the system grows in number of units. The impact and long-term sustainability of the competitive advantage(s) franchisee and franchisor share result from two major principles: the operational synergies and cost advantages due to ever-increasing economies of scale.


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