franchise

Question 1

1. What is 1 advantage for the franchiser?

Answer 1

A low-risk form of growth as the franchisee invests the majority of the capital.

Question 2

2. An advantage of being a franchiser

Answer 2

Receives a percentage of all franchisee’s profits each year (known as royalties)

Question 3

1. An advantage of being a franchisee

Answer 3

The franchise is a well-known business with an existing customer base.

Question 4

2. What’s an advantage of being a franchisee?

Answer 4

Industry knowledge and training is provided by the franchiser

Question 5

3. Franchisee advantage

Answer 5

The franchisee benefits from national advertisements carried out by the franchiser

Question 6

1. Franchiser disadvantage

Answer 6

The reputation of the whole franchise can be tarnished by one poor franchise

Question 7

2. 1 franchiser disadvantage

Answer 7

Only a share of profits id received rather than all profits as it would be if they owned each branch.

Question 8

1. What is a disadvantage of being a franchisee?

Answer 8

There is very little autonomy over decision as the franchiser decided on products, store layout, uniforms etc

Question 9

2. 1 disadvantage of being a franchisee

Answer 9

Royalties have to be paid each year

Question 10

3. Franchisee disadvantage

Answer 10

There are higher initial start-up fees.

Question 11

what is a franchiser

Answer 11

original business

Question 12

what is the franchisee

Answer 12

individual branch

Question 13

what is a franchise

Answer 13

A franchise is a business model that allows businesses to pay a sum of money to own a branch of a well-known, existing business.

Question 14

some main aims of a franchise

Answer 14

1. growth
2. increase market share
3. profit maximisation
   4.increase market value (if PLC)