4.1d Fran's Business Flashcards
What is a franchise?
It is a license for a group of people/a person which allows them to run a part of a large business.
What are the advantages of franchising?
As the business is already well, franchising means there is a smaller chance of the business failing. As well as this, the franchises will receive ongoing support from the business.
What are the disadvantages of franchising?
The franchisee may not be fully interested in the business and they will not be able to control what products are sold. They will also have to give a small percentage of their profits to the business.
What are the advantages of starting a business from scratch?
It allows you to personalise your business as well as this you will be more interested in the business compared to buying a franchise. You also have the ability to control the whole business.
What are the disadvantages of starting a business from scratch?
The start up of a business is risky as there is a chance that the business could fail if it is not promoted effectively.
What factors are important when looking to buy a franchise?
It is important that you are interested in the business and that the business is well known as this means that it will be more likely to successful.
How is opening a franchise less risky than setting up your own business?
Franchising means that you are adopting a business model and selling a well known product rather than selling something which is completely new to the market.
Who is the franchisor?
The person who is granting the licence to another person.
How is help and support useful in franchising?
The franchisor can help the franchisee lead their business and can give them advice on how to successfully manage their business. This means that they will be less likely to fail.
Why is it important that the franchisee is interested in the business?
The franchisee must be interested in the business as this means they will focus on the business and will work hard in order for it to be successful.
Who is a franchisee?
An entrepreneur who pays a fee to trade using the name and products of an established business.
Name the two ways an entrepreneur can set up a business?
- as a franchise
- as an independent business
In terms of success, what is the advantage of franchising?
There is lower risk than setting up independently as the business model is already successful.
List two other advantages of franchising:
- Support and training are provided by the franchisor.
- The franchisse benefits from national marketing.
In terms of independence, what is the disadvantage of franchising?
Franchisees cannot make independent decision
