Franchise

• What is a franchise?

  Business organisation where the franchisor grants a license to the franchisee so they can sell their brand idea or business idea
• What is a franshisor?

  • A business that gives franchisees the right to manufacture, distribute or sell its branded products in return of a fixed sum of money or royalty payment
  • owns the business the idea and decides how it will be operated and run
• What is a franchisee?

  • a business or person that agrees to manufacture, distribute or sell branded products under the license of a franchisor
• What are the advantages?

  • training and marketing provided by franchisor
  • part of an established business
  • easier to make money
  • limited liability
  • lower risk for a new entrepreneur
• What are the disadvantages?

  • royalty payment
  • very expensive to set up
  • cannot make individual business decisions
  • other franchisees may be set up in that area (causes competition)
• Why would the franchisor provide training and marketing for the franchisee?

  Because they want them to succeed as a franchise