Franchises

Question 1

How does a franchise happen

Answer 1

Occurs when on business sells the rights to another business to use its name and sell its product. It also provides advice and training to the franchise who buys the franchise.

Question 2

Why sell a franchise

Answer 2

Can help a business to grow quickly

Question 3

Advantage of selling a business

Answer 3

• Receive money from fee and a percentage of profit
• The business can grow quickly as the franchise provides the majority of set up fees
• Franchisees are motivated as the get most of the profit

Question 4

Disadvantage of selling a business

Answer 4

• Lose some control
• Reputation of the business can be damaged
• Most of the profit go to franchisee