Baskin-Robbins business case study

Baskin-Robbins Case

Baskin-Robbins

Both the Company and the franchisees have various powers over each other. The Company has the most power because it is so large, and because the franchisees are essentially employees, even though they might be called something else. The Company can change the contract that the franchisees have when it renews and they can change rules and guidelines that would make it uncomfortable for those franchisees that they are trying to get rid of. They do not have to worry as much as the franchisees about advertising, if the store is profitable, etc. The franchisees also have a lot of power over various things, though, because they are the ones that decide most of their local advertising and other issues. Because they are franchisees and not officially employees they are able to do some different things with their stores, as long as they stay within certain guidelines for price, service, and other issues. Essentially, these franchisees own their stores, although they could lose their franchise if there are too many problems. The biggest power base that they have is their power over each other in the form of competition for customers. Stores that are relatively close to one another often compete and work very hard to be the best, and this not only helps them showcase their power but it also helps any of the stores that they are in competition with because all of the stores try to do better.

2. The voluntary program that was created for advertising has several advantages. It is voluntary, so any store that cannot contribute still gets the benefit of the advertising without any punishment from anyone. The amount that a store puts in is up to the store, and there are no rules about how much goes into the fund. All of the franchisees seem to think that it is a good idea to have this program. However, some of the main advantages are also the main disadvantages. Voluntary is nice because one does not have to contribute, but it is also bad because a lot of people will not contribute. This makes the captain that was elected to collect contributions look bad, and causes feelings of hostility between the store owners. These same store owners then become disenchanted with the Company for creating this program and feelings of unease start to develop. Problems between the Company and the franchisees, and problems between owners of different stores can all result from this.