Franchises

Random Fact

In France the common color for toilet
paper is not white, but Purple.

France started to use recycled paper to
manufacture their toilet paper and pink is
the color that came out of it.

Franchises

Open Ended

What

Learning Target

I can analyze how a franchise works and operates by listing the advantages and
disadvantages, also by completing the “selecting a Franchise” activity

What is a Franchise?

-A franchise is a contract issued by a local authority that gives a single firm
the right to sell its goods within an exclusive market.

-Business Franchise: is a semi- independent business that pays fees to a
parent company

-The business is granted the exclusive right to sell a certain product or service in a given
area

-The parent company is called the franchiser and each owner of the
individual franchise is called the franchisee

Franchise

Short Video on
Franchises:

https://edpuzzle.com/media/64069ca
2321e3d42fbabed19

Advantages

-A franchise comes with a built in reputation and consumers may already be familiar with the product and brand

-Management training and support:

-Franchisers help owners gain the experience and they need to succeed by running training and support
programs

-Standardized quality:

-Most parent companies require franchise owners to follow certain rules and processes to guarantee
product quality. High- quality products attracts customers

-National Advertising Programs:

-Parent Companies pay for advertising campaigns to establish tier brand names. These ads can increase
sales for each franchisee

Advantages continued

-Financial assistance:

-Some franchisers provide financing to help franchise owners start their businesses. This aid
can help people with fewer resources enjoy the economic right of becoming business owners

-Centralized buying power

-Franchisers buy materials in bulk for all their franchise locations

Disadvantages

-High franchising fees and royalties:

-Franchisers often charge high fees for the right to use the company name

-They also charge franchise owners a share of their earnings, or royalties

-Strict operating standards

-Franchise owners have the responsibility to follow all the rules laid out in the franchising
agreement. (Hours of operation, employe dress codes, operating procedures)

-Purchasing restrictions

-Franchise owners must often buy their supplies from the parent company or from approved
suppliers

-Limited Product line

-Franchise agreements allow franchisees to offer only approved products

-Franchisees usually cannot launch new products that might appeal more to local customers

Activity:

Go to your google classroom and click on the “franchise website”. Your are going
to explore different franchises and some of the specific requirements it takes to
open them.