Franchises

Why do companies decide to franchise?

• In order to expand rapidly

• In order to be flexible

• In order to control the market

What types of products are easiest to franchise?

• Products that are inexpensive

• Products that are popular

• Products that can be copied easily

Who is the franchisee?

• The person who manages the initial company.

• The person who opens the new branch.

• The person who sells the products.

What does the franchiser promise?

• To respect the company rules.

• To take care of all advertising and marketing.

• Not to open a second franchise in proximity.

• To give free materials.

How does the franchiser make money on the deal?

• By taking a percentage of the profit.

• By selling the rights to use the company name.

• By selling more and more products.

• By monopolizing the market.

What does the franchisee promise?

• To respect all the company rules.

• To be creative in order to expand the company.

• To give a percentage of the sales to the head company.

• To use the materials and furniture.

What must the franchisee buy?

• The right to open a shop where (s)he chooses.

• The rights to use the company name.

• All the equipment that represents the company.

• The different services (marketing, finance etc) of the head company.

Name three companies which are franchised.

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