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Burger Beacon Business Model and Its Limitations

Burger Beacon works on Franchise Owned Franchise Operated (FOFO) model. FOFO is a business model in which the franchisor grants a franchisee the right to own and operate a franchise location. The franchisee invests in the business and is responsible for managing the day-to-day operations, while the franchisor provides support, training, and a proven business model. Some potential advantages of the FOFO model include:

•          Greater flexibility: Franchisees in the FOFO model have greater flexibility to make decisions and customize the business to suit local market conditions and customer preferences. However, one should avoid rushing in making changes and always consulting franchisor first before doing any implementation.

•          Higher profit potential: Since franchisees in the FOFO model have more control over the operations of the business, they may be able to operate more efficiently and generate higher profits.

•          Closer relationship with customers: Since franchisees in the FOFO model are also the operators of the business, they can build closer relationships with customers and provide better customer service.

However, there are also some potential limitations of the FOFO model, such as:

•          Limited support from the franchisor: Franchisees in the FOFO model may not receive as much support and guidance from the franchisor as what expected in FOCO model. However, owning a business which you can operate by yourself is a proud thing and long lasting. If the issues arises, you have an authority to resolve; whereas, one will be helpless and get complete loss if the FOCO model doesn’t succeed.

•          Higher risk: Since franchisees in the FOFO model have more control over the operations of the business, they also bear more risk if the business does not perform well. However, more risk comes with more profit as well if the business gets going as you don’t need to share higher royalty or profits to the franchisor.

The limitations are not only associated with the franchisee’s only, a franchisor too has many things to consider while selling franchise on FOFO model. One of the biggest limitations is that the franchisor has limited control over the franchisee's business operations. The franchisor can provide training, support, and guidance; but ultimately the success or failure of the franchise location depends on the franchisee's ability to manage the business effectively. Additionally, the franchisee may not always operate the business in the same way that the franchisor intends, leading to inconsistent brand standards and customer experiences across the locations.

FOFO model requires a great deal of resources and support from the franchisor to ensure that the franchisee is properly trained, supported and equipped to run the business effectively. This can be a significant strain on the franchisor's resources and may limit their ability to expand rapidly. Additionally, the franchisor may not always have full control over the franchisee's operations, which could result in legal or financial liabilities if the franchisee engages in illegal or unethical business practices.

Overall, the FOFO model can be an effective way for a franchisor to grow their business and brand, but it requires careful management and a significant investment in resources and support to ensure success.