Topic One, Part 4 - Franchises Flashcards
1
Q
What is a franchise?
A
A license a franchisee acquires to sell a franchisors product
2
Q
What is a franchisee?
A
a business that agrees to provide a branded product
3
Q
What is a franchisor?
A
The business that gives franchisees the right to sell its product
4
Q
What are the advantages to the franchiser?
A
- Products are under their control
- Allows the business to cheaply expand
- Applicants are carefully selected to ensure an income
5
Q
What are the disadvantages to the franchiser?
A
- Franchisee can affect brand image
- Support costs can be high
- Possibility of conflicts
6
Q
What are the advantages to the franchisee?
A
- Brand is already well established
- Advice is available from franchiser
- easier to get bank loan
7
Q
What are the disadvantages to the franchisee?
A
- Supply’s have to be bought from franchiser
- royalty payments
- Less control
8
Q
How can location be a factor when starting a Franchise?
A
- demographic
- demand
- Type of business
