• Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

Franchises.

Extracts from this document...

Introduction

Franchises Another type of business is a FRANCHISE. Gordon Chester could also consider changing his ownership to a Franchise- making him a FRANCHISOR. If Gordon Chester wishes to change his ownership to a franchise he will be controlling other businesses that want to trade under Fit - for - Life. A franchise ownership is one where a business gives other businesses the right to sell goods and services under its name, in return for total control over the business. A franchisee seeks independence that goes hand in hand with the business ownership. Unlike a PLC franchises do not have different owners. The FRANCHISEE is prepared to pay good money for this set up. To be ethical a franchise system must be transparent. There can be no part of the system that is hidden from the franchisee. ...read more.

Middle

and they would have already established their own work place. The franchisee will pay money to the franchisor allowing him to expand the business. b) Little Capital has to be raised. The franchisee gives the franchisor money and therefore the franchisor does not have to raise much money in order to expand his business. c) The franchisor has control over all of the businesses trading under its name; he supplies the franchisee with brand name goods, training to start up the business, equipment and shop fittings, organise advertisements- including a launch of the new business, advice and loans when needed and supplying stock and material. d) The franchisee will be motivated to make the business a success, as they will want to get the maximum amount of profit and be successful. e) ...read more.

Conclusion

d) Fees and royalties may not be paid on time or at all leaving the franchisor without profits. Time will be wasted whilst waiting for the money. e) The franchise has a ready-made reputation, which can be ruined when a new franchisee becomes involved in the franchise. f) The franchisor is responsible for costly activities such as market research and product development so if a bad and expensive decision is made the business could become bankrupt. An important factor for Gordon Chester to remember is that there are NO disadvantages in setting up the business but only in recruiting franchisees. To set up a franchise a FRANCHISE AGREEMENT has to be drawn up, including the general information about the business. This includes; the name of the business, the description of the business, number of franchise outlets planned, royalties/fees, financial assistant available and support services among other details. The Capital is easily raised compared to a public limited company and there aren't as many shareholders (if not any). ...read more.

The above preview is unformatted text

This student written piece of work is one of many that can be found in our AS and A Level ICT in Business section.

Found what you're looking for?

  • Start learning 29% faster today
  • 150,000+ documents available
  • Just £6.99 a month

Not the one? Search for your essay title...
  • Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

See related essaysSee related essays

Related AS and A Level ICT in Business essays

  1. Articles on franchise

    With a franchise business the franchisee is provided with A wealth of information about the business by the franchisor. i.e. prepare best personality traits for the business. But for the true answer to all your key questions will come from existing franchisees. i.e. Do you feel you were properly trained.

  2. What are Franchises?

    of a franchisee to the franchisor: Advantages Reasons Business grow without risk of debt Franchisees are putting all the money

  1. I am studying a business called McDonalds. It is a franchise in Corby, Northamptonshire. ...

    Secondary- advises customers of production through promotion e.g. advertise, special offers and public relations. McDonalds has all its marketing done in the McDonalds UK in Birmingham. The local advertising is done by mark Richards. E.g. he goes to Rockingham Speedway and asks to put advertising up there. Marketing and sales helps McDonalds meet some of its aims: *

  2. Explain the nature of franchising. Discuss the advantages and disadvantages for both the franchisor ...

    (S. Dibb et al, p335) Franchisors will also gain additional outlets for the distribution of products and services without having too many costs, such as hiring employees and acquiring facilities and equipment. A franchisor may also require the payment of an up front franchise fee, providing immediate revenue.

  1. Business Report on Manchester Airport PLC.

    According to Porter (1985), the primary activities are: 1. Inbound Logistics - involve relationships with suppliers and include all the activities required to receive, store, and disseminate inputs. 2. Operations - are all the activities required to transform inputs into outputs (products and services).

  2. Operating Franchises.

    They look for individuals with a demonstrated ability to lead and manage people, good common business sense, and a track record of success in whatever they are doing. A restaurant background is not necessary, nor is a large amount of capital - although the franchisees will be asked to make a personal investment in the business.

  1. Analysing Profitability of Opening a Subway Sandwiches Franchise in Stockbridge.

    1.2 Objectives: Without objectives any firm will fail. Objectives are usually the firm's targets but they are written out in such a way so that they are SMART (specific, measurable, agreed, realistic, time measured).

  2. Business at Work - Hays Plc

    likely, since anyone can buy shares in a limited company then anyone can take-over the company. This isn't likely to be a person but another company since the cost would be enormous to buy 51% of the shares. Hays operates in the private sector but is employed by certain public Organisations (e.g.

  • Over 160,000 pieces
    of student written work
  • Annotated by
    experienced teachers
  • Ideas and feedback to
    improve your own work