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6. Franchises - Bus Man CFE Higher


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6. Franchises - Bus Man CFE Higher

  2. 2. Franchises The parent company – called the franchisor – sells the rights to use its name, logo and products to an independent operator – the franchisee.
  3. 3. Two types of franchise • Dealer Franchise - Where a company will trade under its own name but will sell a particular product/service. For example; Evan Halshaw Ford • Branded Franchise - Where the branded company provide the name and branding for the outlet. This makes the business appear to be part of a bigger company.
  4. 4. Franchises The franchisee will: • Buy an agreed amount of stock • Make an up-front payment to the franchisor • Give over a percentage of sales to the franchisor • Provide a certain level of service The franchisor will: • Help the franchisee to set up • Offer national promotion • Provide a ready made image, brand, logo, name • They will need to do regular checks of the franchisees
  5. 5. The Franchisee Advantages • Get a well known name • Benefit from national advertising • Get business support –use of website • Simple and quick to set up Disadvantages • Requires a large capital outlay • Limited scope for the individual • Need to hand over some of the sales • One bad franchisee can affect all –poor image
  6. 6. The Franchisor Advantages • Less risky route to expansion • Less capital needed for expansion Disadvantages • Need to monitor the franchisee and control main ideas • Franchisee may not achieve the required standards
  7. 7. Task • Using – retail franchises choose a business to research • Using provide information about the franchisor – when the business started, where and who started it • Return to and provide details on how to become a franchisee in the business and the benefits