Y11 GBME Franchise

What is a franchise?

• A company formed without the ability to raise money from the public

• A business arrangement where the business model is licenced in return for ongoing fees or royalties

• A business run and owned by an individual

• A business not operating for the profit or gain of its individual members

The owner of a franchise concept is called a

• Franchisor

• Franchisee

What liability does a franchise have?

• Unlimited liability

• Limited liability

• Shared liability

Franchisee income profits are ​ (a)   . The franchisor pays ​ (b)   tax.

• taxed
• corporate
• personal
• divided

Who has overall ownership control in a franchise?

• Franchisor

• Franchisee

Sort the Franchise advantages and disadvantages below:

Groups:

(a) Advantages

,

(b) Disadvantages

• Ongoing cost of payments to the franchisor

• well-established brand and product/service

• There may be restrictions on selling the business

• Less autonomy in business decisions and operational freedom

• Established operating procedures, manuals and management systems

• Franchisor offers management training and assistance

• Obtaining finance may be easier

Match the term to the description

• operates the franchise under the franchisor's brand

• Franchise Agreement

• legal document outlining the terms of the franchise

• Royalty Fees

• controls the brand and business system

• Franchisor

• percentage of sales paid to the franchisor

• Franchisee

Which of the following food businesses are not franchises?

• Krispy Kreme

• Baker's Delight

• Boost Juice

• Anna's bakery

A person wishing to start a business would choose a franchise over a sole trader for what reason?

• Full control of the business

• Cheaper taxation

• Established brand recognition and proven business model

• Unlimited liability

A fee paid from franchisee to franchisor based on percentage of sales is called a:

• royalty fee

• advertising fee

• franchise fee

• licence fee