• 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

    Thousand of U.S. business men experience this every year. Unless you have considerable experience in the specific type of business that you are considering going into, it is very probable that you fail. Business format franchising is the nearest you will come to a guarantee of success in today's market.

  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. ...

    train a cleaner to be able to work behind the counter * Dismiss employees, sometimes the employee does not do their job properly so most of them are made redundant. * Keep the work place warm * Provide leisure facilities for the staff * Decide Hours of work * Organise holiday entitlement.

  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.

    It has the basic infrastructure and potential to support growth in passenger numbers to 40 million by 2015. It can manage this growth broadly within the boundaries of its current site by prioritising the use of land for essential activities and moving non-essential activities away from the site.

  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

    Police, South Warwick Council) and in an international way through out Europe 3. Objectives E2 C1 A popular quote for marketing is: "'Would you tell me, please, which way I ought to go from here?' Asked Alice.'That depends a good deal on where you want to get to,' said the cat 'I don't much care where---.'

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