In a franchained business model (a short-term chain, long-term franchise), the company deliberately launched its operations by keeping tight ownership on the main assets, while those are established, thus choosing a chain model. Once operations are running and established, the company divests its ownership and opts instead for a franchising model.
- In a franchised business model, the company initially retains tight ownership of main assets and operates in a chain model. Once operations are established and successful, the company transitions to a franchising model for long-term growth and distribution strategy.
- Coca-Cola follows a franchising model through its operating arm, the Bottling Investment Group. It invests initially in bottling partners’ operations, and as they become successful, Coca-Cola divests its equity stakes and establishes a franchising model.
- McDonald’s is a heavy-franchised business model, with 93% of its total restaurants being franchised in 2018. The company aims to transition to 95% franchised restaurants for its long-term business strategy.
- Despite the heavy reliance on franchising, McDonald’s has been successful in terms of operating income, earning $8.8 billion in 2018 compared to $9.55 billion in 2017.
Connected Business Model Types And Frameworks
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