Chapter 6 Chain Operations Franchising Chain operation a business under one management or ownership MINIMUM of 6 units to be considered a chain operation or franchise KEY POINT to chain operations businesses are found in different geographic Brand A specific identity of a business that is intentionally created through a careful combination of design of its products services offered name logo slogans sig locations natures A brand has a consistent image in the minds of the guests McDonald s all around the country are set up the same and look them same for the most part Multi Unit Operations Business Models Simple form All units owned by the same parent company and has a single owner or investor others are owned by investors Mixed franchise Some businesses are still owned by the parent company and Difference between simple form and mixed franchise form Mixed franchise form provides management services systematically and makes sure that all the units even though they all have different owners maintain the SAME image and character istics personalities Parent company franchisor Other owners investors Franchisee Brand management form When a Mega corporation owns multiple chain oper ations under one parent umbrella refers to each chain operation as a brand It creates a distinctive brand image Advantages of Chain Operations Market Reach reaching many markets to increase sales and thereby increase profits they save per product Economies of Scale Buying in larger quantities to negotiate for lower rates for products and services needed from vendors the more products they buy the more Streamlined Operation Standardizing products and services simplifies opera tions allows for standardized operation procedures SOP s too Enhanced Marketing Power increased visibility gained through greater market reach as long as customers know where you are located you will gain business Value added service options additional services for both costumers and unit chain operations Customer relationship management Tracks customers knows how many times a customer has stayed at their hotel send benefits in the mail the more you stay with us the more benefits you acquire Access to Finances company may have multiple options for raising money for growth Professional Management enhanced legal requirements and complexity of op erations has companies hiring professionals with a better understanding of a com pany s operating needs such as students graduating from hospitality management programs They want higher level education Disadvantages of Chain Operations Operational constraints Products can not be changed many restrictions on creativity of the owner Financial strain you pay fees for services interest on loans Legal Forces if you want to challenge your contract you ll lose your legal ability Must follow the contract Globalization Big Chains Some chain restaurants change things based on where they are located in the world but for the most part stay the same International languages law and other international skills are required for hospi tality these days Top 15 hotel companies Holiday Inn is owned by intercontinental hotels 4 points owned by Starwood hotels Chains are here to stay International global Chains gain strength in numbers Hospitality Trade Associations Rating Services Chapter 8 Associations are formed by 1 Geographic regions 2 A particular segment lodging travel food 3 With a smaller segment of the industry lodging bed and breakfast OR food fast food service What is an Industry Association A professional organization that provides Member training and education Opportunities for networking get people you meets cards and stay in communi cation with them Member recognition and support Promotion of specific industries to the public come you meet all the standards Industry trends and updates Legislative updates you need to know whats happening so when inspectors Legislative Issues Associations serve as the voice of the industry in Washington D C One of the principle parts of these associations National Indian Gaming Association has a very little if any federal influence 1 2 3 Large Hospitality Associations National Restaurant Association NRA meets in May every year in Chicago to discuss Provides information about the industry Promote an annual trade show Information about supplies American Hotel Lodging Association Largest hotel trades show that meets in November in NYC every year How to find relevant associations Look up the Encyclopedia of Associations and find associations relevant to your interest and become a member Governing documents Help associations run smoothy by creating Mission statements Outlines why the association was formed and what its main purpose is The membership or governing board develops this Used to recruit more members to the association By laws Written voted by and approved by the members Rules that govern the association s actions What are the fees will you train the people in your field Vision statement Where do we want to be 5 10 years from now Umbrella statement about the association broader than the mission Why join an industry association Networking Networking is about building a relationship meeting someone for the first time and staying in contact with them Networking is VITALLY IMPORTANT to your career to gain a competitive advan Other benefits for joining an association You will meet future colleagues to stay in contact with and can help build your statement tage future Building up your resume IMPORTANT TO JOIN ASSOCIATIONS BECAUSE 1 Networking Educational opportunities You will meet professionals in your field who have gained a lot of experience over the years restaurants Food associations NRA Founded in 1919 represent over 60 000 members and over 300 000 American Dietetic Association Healthy eating lifestyle nutrition American Culinary Association baked goods Other food associations American Association of Wine and Food International Food Service Executives Association Catering and Institutional Management Association Lodging Associations Promote conferences conventions and education of opportunities in their field Travel and Tourism Associations Promote travel around the world 2 3 1 6 billion people traveling around the world International tourism is expanding World Tourism Organizations Specialized agency with the United Nations largest association International Association of Convention and Visitors Bureau changed their name to Destination Marketing Association Specific
View Full Document
Unlocking...