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Franchises.

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Presentation on theme: "Franchises."— Presentation transcript:

1 Franchises

2 What is a Franchise? A legal agreement to begin a new business in the name of a recognized company.

3 What is a Franchisee? The buyer of a franchise. The franchisee is buying a way of operating a business and a product with name recognition.

4 What is a Franchisor? The person or company who offers a franchise for purchase. Along with the actual company, the franchisor is selling its planning and management expertise.

5 What is Goodwill? Customer’s approval and support of a business. These are very important when a person takes over an existing business. These are the regular customers and they are an extremely valuable business asset.

6 What is the Initial Franchise Fee?
The fee the franchise owner pays in return for the right to run the franchise. The fee can run anywhere from a few thousand to a few hundred thousand dollars. It is usually non-refundable.

7 What are Start-up Costs?
The costs associated with beginning a business. They include the costs of renting a facility, equipping the outlet, and purchasing inventory.

8 What are Royalty Fees? Weekly or monthly payments made by the owner of the franchise to the seller of the franchise. These payments are usually a percentage of the franchise’s income.

9 What are Advertising Fees?
Fees paid to support television, magazine, or other advertising of the franchise as a whole.

10 Advantages to owning a Franchise
An Entrepreneur is provided with an established product or service Franchisors offer management, technical, and other assistance. Equipment and supplies can be less expensive. A guarantee of consistency attracts customers.

11 Disadvantages of owning a Franchise
Franchises can cost a lot of money and cut down on profits. Owners of franchises have less freedom to make decisions than other entrepreneurs. Franchisees are dependent on the performance of the other franchises in the chain. The Franchisor can terminate the franchise agreement.

12 What is a Target Market? The particular group that a company is interested in. It will be the focus of the company’s efforts. The company will want to know everything about them – in as much detail as possible.

13 What are Psychographics?
Personality, opinions, & lifestyle elements, including activities and interests.

14 What are Demographics? Age, gender, race, religion, incomes, education, occupations, family size, social class, etc…..

15 What are Geographic's? Region, state, country, city, and/or area


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