franchises

Question 1

franchise

Answer 1

this is here one firm grants another firm the right to trade under their name in exchange for a fee.

Question 2

advantages of being a franchiser

Answer 2

• a quick method of growth
• low risk
• franchiser gets a percentage of the profits
• the franchiser is freed up to focus on marketing

Question 3

disadvantages of being a franchiser

Answer 3

• the reputation of the franchise is dependent on the performance of the franchisee
• the franchiser only receives a percentage of the profits

Question 4

advantages of being a franchisee

Answer 4

• franchisee has a access to a lot of advice and expertise
• the business name has already been established
• the franchise can give the franchise help with loans
• the franchisee benefits from advertising by the franchiser

Question 5

disadvantages of being a franchisee

Answer 5

• the franchisee has to pay royalty fees
• there are initial high set up fees
• the franchisee has to follow rules
• the franchiser can remove the store