Enterprise structure

[Former Member]

I am working in a project where the following is the requirement

How to create an enterprise structure for a company which has Franchise model business.

Main criteria is the corporate office will control all the activities of the franchise

Corporate office will collect 20% Royalty

Can any one suggest some solution for this kind of scenarios

Sriram

[Former Member]

Hi,

company code

sales org (franchisee)

business area (Business Areas in SAP are used to differentiate transactions originating from different points/lines/locations in business)

profit center (provides visibility of an organizationu2019s profit and losses by profit center) - Profit Centers can be set-up to identify product lines, divisions, geographical regions, offices, production sites or by functions. Profit Centers are used for Internal Control purposes enabling management the ability to review areas of responsibility within their organization.

cost center (provides information on the costs incurred by your business) - in SAP, you have the ability to assign Cost Centers to departments and /or Managers responsible for certain areas of the business as well as functional areas within your organization

The difference between a Cost Center and a Profit Center is that the Cost Center represents individual costs incurred during a given period and Profit Centers contain the balances of costs and revenues.

thanks.

[saravananenbamoorthy]

For a Franchise business I would think that the Franchise will be treated as the Profit center as well as the cost center

I would think that this company would be one legal entity with one corporate office and multiple franchise

In myy opinion it would be better to set up a company code

Each franchise would be a Sales organoization - wherre all the revenues are generated,

Since the cosst will be managed by the Franchise , depending on the type of business you would assign a cost center to each franchise,

At this point we would require further detail on the type of business, Industry in which it is operation and Types of products it is making to get an accurate picture on the organization structture.

Hope this helps

[former_member952818]

Hi,

Basically Sales office is a legal entity of the company whereas FRanchisee is another company. For better control Corporate office is controlling in all activities.

In whatever means Corporate will operate only with 20% royalty and it doesn't get into any of the other operations like Rent Electricity, Communication salary etc of the franchisee. Franchisee have to manage from their 80% income

In this scenario how can we treat Franchisee as Sales office

Please explain me

Sriram

[Former Member]

Hi Azad,

Can you please share how to setup franchise business scenario model in SAP, and if you know any SAP standard building block available on this scenario please let me know.

Thanks

Pranav

[Former Member]

hi

as per your client requrment you can create and customize also like you create

company code

bussineess area

sales organisation and sales office

sales group also

[Former Member]

Your enterprise structure should be like

compant code +sales area + sales office

-Jess