H&R Block is by far the largest franchisor of tax preparation services with over 4,500 franchisees. Startup costs range from about $35,000 to$100,000 and there is no franchise fee. But the royalty rate on all revenues generated by the franchisees is 30 percent—one of the highest rates in franchising for any type of franchise business. H&R Block franchisees are not permitted to operate from home or even in kiosks in stores and malls. Instead, they must operate from a store or office format. Franchisees receive substantial training from H&R Block based on the expertise and systems developed by H&R Block over half a century. Is H&R Block’s royalty rate too high? Why or why not? Discuss in terms of what support the franchisor offers to the franchisee, the nature of the service provided by the franchisee, and the franchisee’s obligations to the franchisor.
Answer to relevant QuestionsFranchise channels are just a particular type of marketing channel. Discuss this statement. Discuss the role of business format franchising in providing services on a consistent or standardized basis. Firms of all sizes have developed many kinds of social-networking tools, instant messaging programs, and text messaging systems to deal with customer service inquiries. But a recent survey by American Express Co. found that ...Nobody, and especially executives involved in channel management, could be expected to know everything about the foreign environments into which their firms’ channels extend. If this is true, what can they be expected to ...Ethan Allen Interiors Inc., one of the leading U.S. furniture manufacturers, is restructuring its Japanese marketing channels. Originally, Ethan Allen sold its products in department stores and they, in turn, bought the ...
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