Franchising - Unit 1 Flashcards
1
Q
What is a franchise?
A
The right given by one business to other businesses to sell goods or services using its name. They remain as an independent business but they must abide by their rules.
2
Q
What’s a franchisor?
A
The business that gives franchisees the right to sell it’s product or service.
3
Q
What is a franchisee?
A
A business that agrees to manufacture, distribute or provide a branded product, under licence by a franchisor.
4
Q
What does the franchisee get when they buy a franchise? Name at least 3.
A
- An established brand name
- Training
- Equipment
- Ongoing support
- Access to goods and services
- Advertising and promotion
- Operate in an exclusive area
5
Q
What are at least 2 drawbacks of owning a franchise?
A
- Start up costs can be expensive
- Royalty payments
- Complicated application process
- Lack of control
- Limited flexibility to make your own decisions
6
Q
Factors in choosing a location might include. Name at least 2.
A
- Proximity to competition
- Busy (passing trade)
- Access (parking, etc)
- Cost
