Franchising: Pathway to Wealth Creation

Chapter 6. The Service Delivery System and Marketing

Three of the top six companies in United States in terms of marketing expenditures are auto giants—General Motors, Ford and DaimlerChrysler—and their franchised dealers. Total annual advertising budgets of the combined companies were $7.7 billion dollars in 2002. During the same year Yum Brands (Pizza Hut, KFC, and Taco Bell) spent almost $1 billion in advertising. One of the reasons entrepreneurs use franchising to grow rapidly is to generate the marketing dollars that these companies use to create a national brand and to build a barrier to entry that keeps would-be competitors out of the market.

The scope of marketing within franchised organizations is vast, and a full understanding of the ...