Coffee Company

i don’t know what the word is, but when companies "branch" out? they own smaller companies, and those companies are spread out. and i know one disadavantage is that the smaller companies that are farther away from the head company can be shut down by the head company if economy becomes bad.
what’s this called? the whole branching thing? i tried to google it but all i get are ads for building up businesses.
and i want to learn the advantages and disadvantages of this too?

There are a number of things you could mean here:

Franchising (McDonalds for example) is where you sell the rights and start-up materials to private business persons who then become part of your network. The idea of this is that the geographical spread of the business increases over time (or ‘branches out’)

Companies that take-over smaller businesses and either keep the brand of the smaller business or convert the smaller business to their own brand (Tescos for example) – this could also be classed as ‘branching out’

Or you could just mean a business that slowly expands by leasing more and more business premises over a geographical area – building a business network of premesis and staff.

One Response

1. Gav Says:
   February 27th, 2010 at 8:17 pm

   There are a number of things you could mean here:

   Franchising (McDonalds for example) is where you sell the rights and start-up materials to private business persons who then become part of your network. The idea of this is that the geographical spread of the business increases over time (or ‘branches out’)

   Companies that take-over smaller businesses and either keep the brand of the smaller business or convert the smaller business to their own brand (Tescos for example) – this could also be classed as ‘branching out’

   Or you could just mean a business that slowly expands by leasing more and more business premises over a geographical area – building a business network of premesis and staff.
   References :

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