Franchise

Question 1

Franchisee

Answer 1

A person who purchases a franchise agreement

Question 2

Franchisor

Answer 2

The person or company who sells a franchise

Question 3

Initial franchise fee

Answer 3

The fee the franchise owner pays in return for the right to run the business

Question 4

Advantages of franchise

Answer 4

• Equipment and supplies may be less expensive
• A guarantee of consistency attracts customers
• An established product or service is being provided

Question 5

Disadvantages of franchise

Answer 5

• The performance of other franchises impact on the franchisee
• Franchise owners are limited in the decisions they can make regarding the business
• The cost of franchises may be high, which can reduce profits

Question 6

What is a franchise

Answer 6

A legal agreement that gives an individual the right to market a company’s products or services in a particular area