1 FRANCHISE a business arrangement where one firm pays for the right to trade under the name of another FRANCHISER - the business which sells the right to trade using its name to others, eg, McDonald’s, Hertz FRANCHISEE - the person who buys the right to trade using the name of the mother company

2 Why buy a franchise? existing, established product therefore more chance of success – less risk cheaper market research and promotional costs may receive help and training from franchiser lower start up costs good ideas can be shared among all franchisees

3 Why sell a franchise? quicker growth - can cover wider geographical area more quickly without having to buy premises or pay staff provides funds - franchisee must buy franchise and pay part of its profits to franchiser

4 DISADVANTAGES reputation of mother company depends upon how good the franchisees are franchisees are bound by contract which restricts how they run their business franchisees must purchase all supplies from the franchiser part of profits/turnover must be paid to franchiser

5 Franchise Tasks. For your jotter……… 1.Explain the meaning of “Franchise. 2.What is the name of the person/business who sells the licence? 3.What is the name of the person who buys the licence? 4.Describe the advantages and disadvantages for the franchiser 5.Describe the advantages and disadvantages for the franchisee. 6.Using a suitable software package, design a poster outlining what you know about franchising. Include examples. These will be displayed in the classroom and on the Business Studies Blog.

6 COMPUTER TASK The following businesses are all franchises. Find out the following information about one of them: 1. what the nature of the business is 2. how much it costs to start up a franchise 3. the support given to the franchisee by the franchisor 4. the size of the business 5. where franchises exist 6. any other information which you think would be relevant Present you findings using PowerPoint