S3 Franchises

What is a franchise?

• A business owned by multiple shareholders
• Business model where an individual purchases the rights to sell a company's products or services
• Business owned and operated by the government
• A type of fast food restaurant

Which of the following is NOT a benefit of franchising?

• Brand recognition and support from the franchisor
• Ability to operate independently without any guidelines
• Proven business model
• Training and ongoing support

What is a franchise fee?

• A fee paid to the government for operating a business
• A fee paid to the franchisor to buy into the franchise

• A fee paid to employees for their services
• A fee paid for advertising and marketing

What is a franchisor?

• A person who buys a franchise
• A person who sells a franchise
• A company that grants the right to sell its products or services
• A government agency

What is a franchise agreement?

• A contract between the franchisee and the customers
• A contract between the franchisee and the franchisor
• A legal document between the franchisee and the government
• A contract between the franchisee and the employees

Which of the following is NOT typically provided by a franchisor?

• Brand guidelines and standards
• Initial training and ongoing support
• Complete independence in business operations
• Marketing and advertising support

The name given to a person that buys the rights to use a brand from the franchisor is a ... ?

What is a royalty fee in franchising?

• A fee paid to the government for operating a business
• A fee paid to the franchisor for the use of their brand and ongoing support
• A fee paid to employees for their services
• A fee paid for advertising and marketing

Which are disadvantages for an entrepreneur of operating a franchise?

• There are strict rules on how you run the business

• Your profits will be very small

• You can only open a single store / branch

• Some of your profits have to be given back to the franchisor

Which of the following is a responsibility of the franchisee?

• Developing the brand and marketing strategies
• Providing ongoing training and support to other franchisees
• Adhering to the standards set by the franchisor
• Approving new franchise locations