1. GCSE Business Studies

2. Lesson Objectives £To describe what being part of a franchise involves (using franchisor and franchisee). ££To analyse two advantages of being a FRANCHISEE. £££To evaluate two disadvantages of being a FRANCHISEE.

3. Starter Activity Entrance Card What can you remember from LAST lesson???

4. A FRANCHISE is NOT a TYPE of BUSINESS OWNERSHIP BUT A TYPE OF MARKETING ARRANGEMENT

5. Today I (the FRANCHISOR) am going to CONVINCE YOU all to become FRANCHISEES and be part of the most successful fast- food restaurant in the world ever!!! Anyone know who I am talking about?

6. The most famous Franchise???

7. Come and join the Team!!!

8. ADD A VIDEO FOR MCDONALDS

10. Agenda Welcome!!! What is a Franchise? The advantages and disadvantages of being part of a Franchise. Background info about McDonalds – your turn to do some work. Can I encourage you to take some notes during this presentation.

11. What is a Franchise? A Franchise exists where an already established business (the FRANCHISOR) offers for sale to other businesses or individuals (the FRANCHISEE) the right to use its products, services and logos. …IN RETURN FOR A FEE (ROYALTY)

12. Advantages of becoming a Franchisee The franchise formula (in our case McDonalds) has been tried and tested and has been a GREAT SUCCESS!! The franchisor provides on-going support to the franchisee to sort out, if necessary, any problems. You will receive adequate training and advice on how to run McDonalds smoothly and efficiently.

13. Advantages of becoming a Franchisee No competition from other franchisees – why is this? National advertising and promotional campaigns will be paid for by the Franchisor. You will be told how much money you need to put into the franchise – this has been carefully forecasted to ensure survival. Reduced risk of business failure.

14. Disadvantages of becoming a Franchisee Substantial amount of capital from you to put into the franchise when you first start – REMEMBER you are buying the RIGHT to our BRAND!!! You won’t have TOTAL control over how you run your McDonalds restaurant – REMEMBER the Head Office have the FINAL say as to how things are run within any McDonalds restaurant.

15. Disadvantages of becoming a Franchisee We expect a % of your sales turnover, which we call a ROYALTY. We expect this each year. It is FAIR if you think about it!!! Any losses have to be covered by yourself!!! You might have a problem if you do not make enough profits to help cover the cost of your initial start-up amount.

16. Franchises are NOT just for McDonalds