Franchising

Question 1

Whats a franchiser?

Answer 1

The official owner if the initial business who sells the use of the business idea.

Question 2

What’s the franchisee?

Answer 2

The person/group who are legally given permission and buys the right to copy a business format/sell under the business name.

Question 3

Advantages of being a franchise:

Answer 3

The official owner has already created a successful business which is making profit meaning the business is tried, tested and proven so it is more likely that the business opening will be a success.

People already recognise the brand name and reputation.

It’s still our own business.

You can benefit from national advertising

Support and training is offered

Question 4

Disdvantages of being a franchise:

Answer 4

There may be high initial costs

You would be monitored closely

There is little flexibility meaning, due to it not being your own independent business, you cannot sell your own products.

You could result in effecting the businesses reputation.

You have to do what the franchiser wants you to do.

Not all profit is yours

Question 5

What is a franchise?

Answer 5

When the owner of a business (the franchiser) sells the right to use that idea to another person (the franchisee).