Flower Mound High School Introduction to Business History And Basics Of Franchising 20 Feb2010

1. Name ___________________________________
History and Basics of Franchising
http://franchises.about.com/od/franchisebasics/a/history.htm
Use the link to assist you in answering the following questions.
1. What person is believed (by many) to have started the concept of Franchising?
2. The term “franchising” derived from ancient French is defined as what?
3. Explain, in your own words, how the concept of franchising can be traced back
to the middle ages.
4. What lead to the beginning of the type of franchising that we are familiar
with today?
5. Albert Singer came into the scene in 1851 using franchising as a way to
distribute his sewing machines over a widespread geographic area. What was it
that he prepared that became the basis for our modern version of franchise
agreements?
6. Explain the event(s) that led up to the formation of the International
Franchise Association (IFA).
7. What is the UFOC and what does it do?
8. What is the FDD and what does it do?
http://franchises.about.com/od/franchisebasics/a/what-franchises.htm
9. How many different types of franchise businesses are available today, and
list 6 of these types.
10. Franchising is a popular method of business ownership for the person that
wishes to be in business FOR themselves but not what?
http://franchises.about.com/od/buyingafranchise/tp/different-types-offranchise-
o.htm
11. Explain in your own words what a single unit franchise is.
12. Click on “Buying and Existing Franchise”. What are 5 PROs of buying an
existing franchise?
13. What are 4 CONs of buying an existing franchise?
Hit the back button... and return to the previous page or
http://franchises.about.com/od/buyingafranchise/tp/different-types-offranchise-
o.htm
14. What is a Multi-Unit Franchise?
15. (click on Multi-Unit Franchise) In a Multi-Unit franchise, the Franchisee
manages all day-today operations how?
16. In a Multi-Unit franchise, who typically handles all of the day to day
operations at each location?
17. Is the risk of owning a Multi-Unit franchise greater or lower than owning a
single unit? Why?
18. What are the two types of Multi-Unit franchises and explain each.
19. A multi-unit franchise is usually a good option for what type of business
owner?
(Hit back button) or
http://franchises.about.com/od/buyingafranchise/tp/different-types-offranchise-
o.htm
20. What is the difference between an area developer and a Multi-Unit franchise?
21. Click on Area Developer. What are the rights of the Area Developer?
22. An Area Developer usually has a schedule that tells him/her what?
23. What are a couple of the responsibilities of an area developer?
24. What characteristics are needed for someone to be an area developer?
25. What are the advantages of becoming an area developer?
26. Click on Master Franchises. How does master franchising work?
27. What are the advantages to being a master franchise?
http://franchises.about.com/od/franchisebasics/tp/how—m uch-does-afranchise-
cost.htm
28. How much are most franchise fees?
29. Which type of franchise fee would be lower?

2. 30. What is typically covered by the franchise fee?
31. How much money is usually required to pay a franchise attorney? Why would
you want to get a franchise attorney?
32. What is included in “Build-Out Costs”?
33. What are three more items that are common start up costs for a franchise?
http://franchises.about.com/od/buyingafranchise/tp/buying-afranchise.htm
34. What is the most crucial step of the franchise-buying process?
35. Click on Choosing the Right Franchise. There are three things mentioned on
this page (In bold print) that you should consider when choosing a franchise.
Explain each in your own words.
36. (hit the back button) When deciding what franchise you can afford, why
should find out what your overall investment is going to be?
37. click on “Steps to take after you choose your franchise” .. Explain what is
meant by Do Your Homework and Documentation.. In your own words.