franchisor and franchisee

Question 1

what is a franchise?

Answer 1

a franchise is where a large, well-known company (franchiser) allows a smaller business to run under its brand, e.g. macdonalds.- in exchange for an initial cost and royalty payments = a % of turnover or profit.

Question 2

advantages of a franchiser?

Answer 2

they don’t have to spend large amount of money on expansion.
they have full control over the products needed in order to operate - charge more.

Question 3

disadvantages of a franchiser>?

Answer 3

lack of control over business in comparison to if they had run it
financial support which franchisee may need starting out

Question 4

should a business become a franchise?

Answer 4

this depends on their willingness to invest time and money into the franchise. As well as how well established their branding is.

Question 5

what is a co-operative?

Answer 5

a co-operative is a company run by members (employee’s and customers) and profits are distributed equally between memebers rather than shareholders.

Question 6

advantages of a co-oporative?

Answer 6

legally easier to set up

motivation because everyone is working for the same goal

Question 7

disadvantages of a co-perative?

Answer 7

limited capital

weak management