IRE SHA FCN FRANCHISE

Franchises Aim: Identify the characteristics of a Franchise Objectives: Define a Franchise Know the difference between a Franchisee and a Franchisor Give examples of types of Franchise Explain 3 advantages of a Franchise Explain 3 disadvantages of a Franchise

An Introduction to Franchising PUPIL RESEARCH & PRESENTATION TASK In groups of 4 – Classwork – Peer Assessed You will need to carry out research and make a group presentation which covers the following points –What is a Franchise –The advantages and disadvantages for the franchisor –The advantages and disadvantages for the franchisee Skills NeededHabits of Mind

A Franchise is where a _____ company allows a _____ company, to use their ____ and ____________ to sell their products. large small NameBusiness Format

The person buying the Franchise The person selling the Franchise

An agreement is made between the franchisor and the franchisee Franchisor allows the use of their business name for an agreed length of time Franchisor provides materials, training and advice Franchisee must provide the money to start their business Franchisee must make regular payments to the franchisor

1.TRAINING How to start and operate the business followed by on-going training after the business has been launched. Skills the team need In-store sales techniques Advice and guidelines on running the business

2.EQUIPMENT Dictate how the store is decorated, what shop fittings are to be used

3.MATERIALS TO USE IN PRODUCTION OF GOOD/SERVICE Franchisor usually has a central supplier and insists that all franchisee’s order and purchase raw materials and packaging etc from their distributors

4.ADVERTISING The franchisor usually undertakes in advertising campaigns which all the individual franchisees benefit from > they all carry the same brand name

5.BRAND NAME Usually very strong and established in the market place Reduces the risk and the uncertainty faced by franchisee

6.AREA PROTECTION A franchise is usually given an exclusive area in which to sell where no other franchise’s will operate

Good chance of success, since product is already known Easier to borrow money, because of past success Problems will probably have happened before Get support from the franchisor Advertising is organised and paid for by the franchisor Franchisees are usually small – so pay attention to detail

Franchise may be taken over Owner cannot make all decisions Cannot sell the franchise without permission Have to make payments to franchisor Supplies must be bought from franchisor, which may be expensive

The McDonald’s Franchise Read the Case Study and Complete 1.Key Features of a Franchise and 2.Advantages and Disadvantages for both the Franchisee and Franchisor in your Worksheet

Key Features of a Franchise allows the use of their business _____ for an ______ length of time provides materials, _________ and advice must provide the _____ to start their business must make ______ payments to the Franchisor - ______Payments royalty training agreed regular money name royalty name agreed training money regular

More or less Your Own Boss Company Advertising Training Less Risk Someone else’s Idea Sharing Information New ideas have to be approved by the Franchisor Profits shared Franchisor has total control Franchisor can end the agreement Decide which is which !!! Decide which is which !!!

Wide Geographical Spread of Franchises New ideas received Franchisor can end the agreement Share of Profits Franchisor has total control Rapid Growth Low Cost Less Risk Reputation can be damaged Decide which is which !!! Decide which is which !!!

The McDonald’s Franchise Visit the website and view the details of the following Franchisee’s Write a report on what McDonald’s offers its Franchisee’s ?

Homework Based on what you have researched today on the McDonald’s website write a list of the skills / qualities that you think the franchisor will be looking for in a franchisee. Explain why each is important.