Business Unit 9

• What is one drawback of franchising for the franchisee?

  It is not cheap.
• What is a restriction that franchisees face?

  Restrictions on actions, such as products sold.
• Who owns the brand in a franchising agreement?

  The franchisor owns the brand.
• What is a potential risk for a franchisee if the franchisor fails?

  The franchisee may face significant challenges or losses.
• What is one benefit of organic growth for a business?

  It has less risk than external growth.
• How can organic growth be financed?

  It can be financed through internal funds.
• What does organic growth build on?

  It builds on a business's strengths.
• What is a characteristic of the growth rate in organic growth?


  It allows the business to grow at a more sensible rate.
• What is a drawback of organic growth related to market conditions?

  Growth achieved may be dependent on the growth of the overall market.
• Why might it be hard to build market share for a business that is already a leader?


  It is hard to build market share if the business is already a leader.
• What is a concern for shareholders regarding organic growth?

  Shareholders may prefer more rapid growth.
• What is a management challenge associated with franchises?

  Franchises can be hard to manage effectively.
• What is one benefit of franchising for the franchisee?

  Running your own business.
• How does franchising help in raising finance?


  It makes it easier to raise finance.
• What advantage does a franchisee have regarding purchasing?

  The franchisee benefits from the buying power of the franchisor.
• Why is franchising considered a low-risk method of market entry?

  It provides a proven business model and support.