No-for-profit + franchises

Defintion of non-for-profit

a non-for-profit (NFP) organisation is an entity that exists to serve a specific purpose or cause, benefiting the community or its members rather than generating a profit for owners.

Any surplus funds are reinvested to support its mission and activities, not distributed as profits

Describing NFP

• operates for a specific purpose, benefiting members or a cause, not a profit

• Includes charities or sporting clubs ect

• Profits are reinvested into the organisation to support its goals or charitable activities

• Tax exemption

• Must register with the ACNC

Definition of franchise

A business to business contract to licence the use of a brand and its processes. B2B contract

• consists of

  • a franchisor: successful business providing the product or service (can revoke licence from franchisee)

  • A franchisee: independent business with the rights to use the business name and model to sell the franchisor’s goods and services.

Franchise features

• franchise agreement: legal contract between franchisor and franchisee

• Franchise fees: initial and ongoing payments (royalties, marketing)

• Established brand recognised and trusted name

• Proven business model: tested and successful operations

• Training and support: guidance in operations, marketing and customer service

• Marketing assistance: local and national campaigns

• Standardised operations: uniform products ad services

• Supply chain access: approved suppliers at discounted rates

• Limited autonomy: franchisee follows franchisor’s rule

Franchisor advantages

• quick method of expansion

• Limited capital expenditure

Franchisee advantages

• access to a proven successful business model

• Support -lower risk

Franchisor disadvantage

• Does not receive all profits

• Affected by franchisee’s poor image

Franchisee disadvantage

• can be taken away

• Not have full control

• Payments to go to Franchisor