Outline the characteristics of a franchised business.

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The last type of business is a franchise. This is the biggest business there is. A franchise is where a large company allows smaller businesses to use their name there are the franchisor and a franchisee. The franchisor allows the use of their business name for an agreed length of time and provides materials, training and advice. The franchisee must provide the money to start their business and the franchisee must make regular payments. An example of a franchise is Subway and Hertz.

Advantages of a franchise is that there is high chance of success as it’s easy to borrow money. Also problems will have been overcome already and a lot of support is available from the franchisor. Furthermore, advertising is organised and paid for by the franchisor which makes work easier. Lastly, franchisees are usually small which means they can work really hard on small details to ensure its good which can benefit sales.
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Disadvantages of a franchise is that is can be removed if it is becoming unsuccessful. Also supplies have to be purchased from the franchisor which can be expensive and they have to make royalty payment to the franchisor. Franchisee cannot make all the decisions and they cannot sell the franchise without permission which can lead to many difficulties.

The entrepreneur will also need to consider different types of markets as well as different ownerships. There are many different types of markets, these include local, regional, national, EU and global. Location is very important to a business. ...

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