t-shirt store projet

HKR

Tshirt Store Company Finding a franchise organization

Carole Barbet, Marion Franquin, Jean-Cédric Callies & Michele Baravelli

17/01/2011

International Marketing Project – January 2011


1

The Index

I. Introduction p.2

a. General Introduction p.2

b. Background p.2

c. Purpose p.3

d. Our research questions p.3

II. The Theoretical Framework p.4

a. The Franchise definition p.4

b. The different types of Franchises p.5

1. Product Franchise p.5

2. Business Format Franchising p.6

3. Manufacturing Franchise p.6

c. Tshirt Store™ and its Franchises p.6

d. The summary p.8

III. The Research Method p.9

a. The type of study p.9

b. Collecting data p.9

IV. The Results and Analysis p.11

a. The Results p.11

b. The Analysis p.12

V. The Conclusion p.13

VI. The References p.16

a. Websites p.16

b. Lectures p.17

c. Others p.17


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I. Introduction

a. General introduction

According to the directives of our International Marketing course we have to

make a project with practical implementations.

Our assignment has for main goal to help a Swedish company of our choice

concerning a marketing related problem. After many hesitations and difficulties met to

find one, we finally decided to collaborate with Tshirt Store™.

b. Background

(The following information come from a Tshirt Store™ powerpoint that Ms. Johan Graffner has

given to us at the beginning of our study).

Tshirt Store™ is a Swedish company founded in 2006 with the opening of its

first shop in the center of Malmö. Tshirt store™ is a small firm directed by John

Graffner with only six employees. As a new company on the market, Tshirt Store™

grow up quickly and open a second store in Stockholm in 2007. The company,

showing success decided to produce itself its products in Turkey. 2008 is marked by

the opening of the first franchise store in Copenhagen and in Eskilstuna. One year

later, the company opened ten others franchise stores in Sweden and one in Hong-

Kong.

In 2010, around twelve news franchise stores opened in Norway, Russia and Spain.

Today TShirt Store™ plans to expand and define its new goals. The company wants to

create new stores in major cities of the European Union. TShirt Store™ aims to create

hundred new franchise stores by the end of 2014. Because of the competition, it is

very important for a small company like Tshirt Store™ that their marketing decisions

lead to a good development of the firm.


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c. Purpose

This project aims at helping Tshirt Store™ to find franchisees in Europe. The

company has the willing to expand its brand in the major cities of more than 100 000

inhabitants and in the international airports of the European Union.

Therefore, the purpose of this paper is to find organizations and partners that would

help Tshirt Store™ to find franchisees like for instance, websites where they could

advertise on it. We also are going to find out what are the prices of these kinds of

organizations. This research is part of the marketing strategy of the company to find a

future partner.

However, the director of Tshirt Store™, John Graffner, asked us to focus on the

United Kingdom as well as on Ireland, and then we will emphasis a little more on

these nations.

d. Our Research Questions

This project seek to answer to these following questions :

Which kind of organizations and partners will likely work with Tshirt

Store™ ?

What are the prices of these organizations ?


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II. Theoretical Framework

a. The Franchise definition

The franchise is a collaboration system between several firms which are financially

and legally independent.

These firms want to reach the goal of commercializing products or services within the same

sign.

In this system, there are mainly two characters : the franchiser (who gives the other a product,

concept, know-how or a service) and the franchisee (who sells the product, concept, know-

how or the service of the franchiser).

The franchiser makes available to the franchisee the right to exploit a company, a brand in

conformity with the concept that he has created at the beginning.

This method aims at improving the benefits, expending the company and being open to new

markets for the franchiser. In fact, it involves remuneration or an economic advantage for the

franchiser which is the owner of the brand and the know-how.

And for the Franchisee, it helps him to make more benefits by selling the products or services

of concepts already done and mostly trustful.

A franchise contract tends to be more in start-up situations and this contract might last 5 years

and might be renewable. (Global marketing, Svend Hollensen, Part III, p364, table 11.2).

Franchisers and Franchisees have both bonds to follow and to respect to make the

franchise work normally :

(http://www.franchise-magazine.com/guide/definitions-et-donnees-chiffrees-1.html, Jean-Pierre Pamier, Franchise-Magazine.com, 2010/02/17)

-The franchiser has to make available and exploit a successful concept during a certain period

of time which would be reasonable.

-The franchiser has to be the owner of the brand, the logo and other distinctive signs that

might be sold. Moreover, he has to give the franchisee the right to use this brand, logo and

other distinctive signs.

http://www.franchise-magazine.com/guide/definitions-et-donnees-chiffrees-1.html


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-And finally, the franchiser has to have a real know-how, and has to give it to his franchisee

during the entire contract validity, including a commercial assistance.

-The franchisee has to give the franchiser remuneration, and in exchange, he obtains the use

of a brand, but still stays legally independent.

-Then, the most important bond to respect for a franchisee is not to disclose the know-how of

the franchiser.

b. The different types of Franchises

First of all, in a retail franchise, like TShirt Store™, the franchisee will generally

occupy retail premises and sell products. The business depends totally of the premises, with

sales coming from walk-in consumers.

Moreover, the franchise system can be set up as a direct or indirect system (Global

marketing, Svend Hollensen, Part III, p362, figure 11.3). In the direct system, the franchisor is

controlling and coordinating the activities of the franchisees directly. In the indirect system, a

master franchisee (subfranchisor) is appointed to establish and service its own subsystem of

franchisees within its territory. The advantages of the direct system include access to local

resources and knowledge, more adaptation. In another hand, the success of the indirect system

will be determined by the capabilities and commitment of the master franchisee.

To be able to understand how TShirt Store™ operates, it is important to have a deeper

knowledge about the different types of Franchises:

1. The Product Franchise (Global marketing, Svend Hollensen, Part III, p361)

Manufacturers use the product franchise to know how a retailer distributes their

products. The manufacturer grants a franchise the authority to distribute goods by the

manufacturer and allows the owner to use the name and the trademark owned by the

manufacturer. The franchisee must pay a fee or purchase a minimum inventory of stock in


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return for these rights. We can give some well-known brands which operate by this way, like

Goodyear or Ford Motor Company.

2. Business Format Franchising (Global marketing, Svend Hollensen, Part III,

p361)

This is the most popular form of franchising. In this approach, a company provides a

franchisee with a proven method for operating a business using the name and trademark of the

company. The company will usually provide a significant amount of assistance to the business

owner in starting and managing the company. The franchisee pays a fee or royalty in return.

We can give some popular examples of business format franchises like McDonalds or Carvel

or even Tshirt Store™.

3. Manufacturing Franchise

These types of franchises provide an organization with the right to manufacture a

product and sell it to the public, using the franchisor’s name and trademark. This type of

franchise is found most often in the food and beverage industry, but can be applied to other

industries. We can give some popular examples as well, like Coca-Cola and Sealmaster.

c. Tshirt Store™ and its Franchises

Tshirt Store™ has a particular way of finding its potential franchisees. In fact, the

company trusts in its special, original and particular concept. The firm wants to sell its entire

concept, and uses it in the “Business format franchising” and the “Direct franchising model”

ways of collaborating.

And, as a matter of fact, the willing of being in good contact with the person who will open

the store is a very important thing. In other words, the firm tries to make sure that the

franchisee has well understood the purpose of their collaboration and has also learned

correctly its know-how. The atmosphere of the firm has to be transmitted to the franchisee

and of course to the client.


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Actually, this is for this reason that Tshirt Store™ prefers to franchise instead of licensing or

having a distributor. In a way, this is part of the concept that Tshirt Store™ wants to make

clear to potential collaborators.

Tshirt Store™ have some more requires about having new franchises.

Potential franchisees must also be present in cities where there is a strong interest for the

company to enter a new market, in fact, the city should be chosen with a population exceeding

100,000 inhabitants, because there is a big influence. The airports are also targeted because

thousands of people a day stopover, travel and try to entertain themselves during the waiting

times, and most of the time, shop.

Another important criterion for the company is the requirement of a minimum of £ 35,000

investment to a new opening of a concept store. In addition to this, the company will

accompany the franchisee with a train that will help him in the beginning with store planning

and development.

It seems like the hardest part is finding the potential franchisee because, the firm is

very young and needs a little bit of time to be more famous. As a consequence, to find

someone willing to invest was not that easy at the beginning, but it is getting each time easier

as Johan Graffner from the company told us.

Actually, they have different manners to find their future collaborators.

The firm is first trying to operate with the different contacts it has, which are numerously

increasing these last years because the firm is expending and is getting more and more famous

each day.

But, in fact, its initial idea is to visit stores during business trips and to get in touch with them

very directly by displaying its products and brand concept. This is the better way to get a

positive answer and a future collaboration.

And to prospect in Germany, in the United Kingdom and in Ireland, Tshirt Store™ has

decided to publish advertisements on websites’ franchise organizations. The company is now

working with the website www.franchisedirect.com.

These websites with big affluence will help to get well-known, mainly because persons who

want to become franchisees first try to find solutions on the internet and such websites.

http://www.franchisedirect.com/


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In fact, the firm only has to post a little description of the firm and the expectations it requires

and wait for the franchisee to contact itself. This is a passive way to prospect and when results

come, we are almost sure that they would be positive.

Moreover, with this method, they could prospect on the hole Europe at the same time, it is

seen as a gain of time, partly because by reading the description, the future collaborator

already know what the company deals with and there is no need to introduce the concept

again.

d. The summary

To summarize our mission, we have to find franchise organizations on the internet on

which Tshirt Store™ could advertise to find franchisees in the United Kingdom and Ireland.

In fact the company is already working with such a website and wants to work with others to

become more influencing. Its criteria to find a franchisee are precise (being present in big

cities, collaborating with a business format franchising and a receiving minimum investment

of 35 000£ from the franchisee).

Which method are we going to use ?

What are going to be our results ? Are the organizations expensive ? Are they numerous and

have a good influence on the future franchisee that is searching for a franchisor ?


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III. The Research Method

a. The type of study

We have chosen to do a franchise study for Tshirt Store Company. Our purpose with

this project was to do a prospection to find organizations, which can be able to receive offers

for franchising. Afterward, TShirt Store™ will be free to decide which kind of franchising

partner they would like to work with.

According to our purpose with this project, we decided to do a prospection through an

Internet research to find an organization working in Great Britain, our first criteria. Then, we

looked to the prices, one of the most important things for TShirt Store™ was to work in

important cities (more than 100 000 inhabitants) and we looked to the most visited websites,

which is very important to have an efficient result.

A prospection is the capacity to search potential customers or buyers and to change

them as real partners. This type of analysis will help the company to find franchises in

England, and that was our part of the TShirt Store™ project.

b. Collecting data

The first step of our prospection was to define the criteria of the research. As we said

in the previous part, we operated with specifics criteria given by TShirt Store™ in a first time.

Otherwise, we called our contact in the company which is Johan Graffner, in order to give us

more information about what they wanted from us to focus on. And the last possibility to get

our criteria was to go to their website.

According to this type of research, we got the specifics information’s we needed to do

the prospection. First of all, our research was focused on the localization, which was England

and Ireland, and especially concerning cities of more than 100 000 inhabitants. Then, we

looked to the number of visits everyday in the website of the organization, it was really


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important to get an important organization to have an efficient result for the company. And

the last point was that the franchisee has to invest a minimum of 35 000 pounds.

Then, that was the part to think about the research specific words and key words for our

prospection. So, our research motor was Google Search, and we decided to focus on a few

key words, like “franchise organization”, “advertise franchisor”, “British franchise

organization” or “franchisee recruitment”. It was enough to start a research about any

organization open to receive Tshirt Store Company as a partner.

So, the reason we have chosen an Internet prospection was to collect our primary

data’s as soon as possible, because of the time limit with this project. Since our purpose was

to find a partnership for Tshirt Store to help them to implant their activity by franchising, an

Internet prospection made it easier for us to achieve that purpose. And the last reason was that

we couldn’t meet directly organizations in Great Britain and Ireland, it would have been too

expensive. That is why, this solution was the most adapted to get an efficient result. Then, we

had everything to begin our prospection for Tshirt Store™ and we’ll see in the next part what

we have found during this study and research.


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IV. Results and Analysis

a. The results

Our research and results obtained will aim to help Tshirt Store™ to find

websites franchise organizations, in order to advertise on it, and then find and recruit

the right franchisee that would fit perfectly with the company’s expectations. Tshirt

Store™ has a budget of 1000€ per month to recruit a franchisor on an advertisements

website, and spend already 100€ per month to advertise on Franchisedirect.com. That

would mean that the company would be able to advertise on several websites at the

same time, and this would allow a better penetration in the market.

For the firm, the first strategy to enter the market in the United Kingdom and in the

Ireland would be via internet, and by doing this research ourselves, the company will

certainly have a gain of time.

After a few weeks, we have found several organizations, sort them and

compare them to make the choice easier for Tshirt Store™. We will now present in a

table the four most important websites franchise organizations that we have found the

most interesting to advertise on it for the company. In fact, we have sorted the

organizations according to many criteria such as prices, the duration of the

advertisement, the number of visitors, and the countries involved by the organization.

Name of the websites

organizations Prices

Duration

of the

advert

Number of

visitors

Countries

involved

http://www.startinbusiness.c

o.uk/sellfranchise/ 57€ 4 weeks

Thousands

each day UK

http://uk.businessesforsale.c

om

120€

(premium

version)

2 months 20 000

each day

World Wide

(can choose the

country)

http://uk.businessesforsale.com/



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We have also found other franchise organizations that might be relevant.

Unfortunately, on these following websites, there was not enough information, so we

have decided to write them emails in order to ask some more explanations about

prices, visitors and the countries involved. However, we did not get any answer, but

we still think that it would be worth it to mention these franchise organizations.

- franchiseadvantage.com

- IFA franchise (International Franchise Association)

- BFA (British Franchise Association)

- EFF (European Franchise Federation)

In these organizations, the most relevant might be, for the British market, the

BFA (British Franchise Association). Nevertheless, we could not find on this website

the information we wanted to know but this association is the most famous in the

United Kingdom and in Ireland and we really think it is worth it to get in contact with

them to find more information. Companies such as McDonald, Burger king for

instance are already registered on this organization.

b. The Analysis

After comparing the different results and thinking about them, we deeply

believe that the website company which would fit the most to Tshirt Store™ would be

http://uk.businessesforsale.com/ . In fact, this firm has the best quality price ratio. It is

only 60€ per month for the premium version which allows things such as being well

positioned to be seen at the beginning of the franchisors lists. Moreover, this website

http://www.theukfranchisedi

rectory.net/ 300€ 1 month

20 000

each

month

World Wide

http://www.the-franchise-

shop.com/

Low cost

company

1600 per

day World Wide



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is affluent because there are more than 20 000 visitors each day, comparing from the

other sites where there are 20 000 visitors per month. The other advantage of this

website is that we can choose in which country you want to advertise the most.

The http://www.theukfranchisedirectory.net/ company seemed also attractive for

Tshirt Store™, but as we can see in the table results, its prices are much more

expensive than its competitors (and the number of visitors is only 20 000 per month).

Then, http://www.startinbusiness.co.uk/sellfranchise/ might also be taken into account

by Tshirt Store™ because it is not that expensive and the quality price ratio is not

negligible.

Concerning the low cost website, which is http://www.the-franchise-shop.com/, we

think that it could affect the company’s image to register to a low cost company. In

fact, the quality aspect of the brand would not be justified. We recommend Tshirt

Store™ not to concentrate on this organization too much. First of all because the

Tshirt Store company has a high budget to recruit franchisees, and products high

quality items.

http://www.theukfranchisedirectory.net/

http://www.startinbusiness.co.uk/sellfranchise/

http://www.the-franchise-shop.com/


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V. Conclusion

The advantages of franchising are improving the benefits, expanding the

company and penetrate new markets in host countries. Tshirt Store™ already

franchise in Scandinavia and wants to expand in the big cities of Europe. The strategy

of the firm is to internationalize and penetrate the market by recruiting franchisees on

websites franchise organizations.

Johan Graffner, the president of the company, has given us the mission to prospect

franchise organizations which are present in the United Kingdom and in Ireland. This

would help the firm to advertise and recruit franchisees according to many

expectations and criteria.

After collecting the results and analyzing them, we definitely suggest to Tshirt

Store™ to work with http://uk.businessesforsale.com/, and working with

http://www.startinbusiness.co.uk/sellfranchise/ might be a plus. That would represent

a budget of 217€ per month. Moreover, we let the company choose if it wants to work

or not with the BFA. As we can see, the budget fits perfectly with Tshirt Store™’s

expectations.

It was not in our mission, but still we have taken a look about what could also

help Tshirt Store to find franchisees in the United Kingdom and in Ireland. We think

that taking place in exhibition would be efficient, because the company uses to visit

directly the shops to convince them to collaborate. In fact, by doing this, Tshirt

Store™ would meet the franchisees face to face. We have several dates of exhibitions

where the firm might go :

- The British and International Franchise Exhibition– Olympia London – 18th – 19th

march 2011

- The Scottish Franchise Exhibition – 19th may 2011

- The British Franchise Exhibition – 10th – 11th june 2011


http://www.startinbusiness.co.uk/sellfranchise/


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During the realization of the study, we faced some difficulties. The most

important for us was finding a company that would like to collaborate with us. Tshirt

Store™ has answered very quickly, and we thank them for that.

At the beginning we did not really know how to make the link between the theory and

the practical part, but Johan Graffner was really helpful.

The main difficulty while finding the results was not to find the organizations

themselves but to find the information concerning the ladder.

It was the first time we did such a project, and we all feel rewarded by it.


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VI. References

a. Websites

The different types of Franchises Businesses, written by Nazir Daud, published the

2008/05/08

http://ezinearticles.com/?Different-Types-of-Franchise-Businesses&id=1162651

Different types of Franchise Ownership, written by Don Daszkowski

http://franchises.about.com/od/buyingafranchise/tp/different-types-of-franchise-o.htm

Guide pratique de la Franchise / devenir franchisé, written by Jean-Pierre Pamier,

Franchise-Magazine.com, published the 2010/02/17

http://www.franchise-magazine.com/guide/definitions-et-donnees-chiffrees-1.html,

Tshirt Store™

http://www.tshirtstoreonline.com/us/

Franchiseinfo

http://www.franchiseinfo.co.uk/

The British Franchise Association

http://www.thebfa.org/

The European Franchise Federation

http://www.eff-franchise.com/

The International Franchise Association

http://www.franchise.org/

Franchiseadvantage.com

http://www.franchiseadvantage.com/

http://ezinearticles.com/?Different-Types-of-Franchise-Businesses&id=1162651

http://franchises.about.com/bio/Don-Daszkowski-42803.htm

http://franchises.about.com/od/buyingafranchise/tp/different-types-of-franchise-o.htm

http://www.franchise-magazine.com/guide/definitions-et-donnees-chiffrees-1.html

http://www.tshirtstoreonline.com/us/

http://www.franchiseinfo.co.uk/

http://www.thebfa.org/

http://www.eff-franchise.com/

http://www.franchise.org/


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The UK Franchise


Définition de la franchise selon le code de déontologie européen de la franchise

http://www.franchise-selection.com/franchise/definition_franchise.htm

AC Franchise, La franchise ? définition de la franchise, inspired by the European code

http://www.ac-franchise.com/fr/cms-definition%2Bde%2Bla%2Bfranchise-

10_17_54.html

b. Lectures

Global Marketing, Svend Hollensen, Chapter 11, Part III, P.361

Global marketing, Svend Hollensen, Part III, p364, table 11.2

Global marketing, Svend Hollensen, Part III, p362, figure 11.3

c. Others

T-Shirt power point presentation, sent by Johan Graffner

Skype conferences with Johan Graffner


http://www.franchise-selection.com/franchise/definition_franchise.htm

http://www.ac-franchise.com/fr/cms-definition%2Bde%2Bla%2Bfranchise-10_17_54.html

http://www.ac-franchise.com/fr/cms-definition%2Bde%2Bla%2Bfranchise-10_17_54.html

t-shirt store projet

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