Types of Business- The Post office:Franchise

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Franchise

The Post Office

A franchise is a business based upon the name, logo and trading methods of an existing company. The franchisee is the person who runs the business. In this situation a business is started using the name of a well-known organisation. The owner of the small business (the franchisee) pays the larger company (the franchisor) a share of the profit and a fee to use the name. In return, he or she is given help and support to run the business. Examples of franchise business include, McDonalds, KFC, The Body Shop, and Toni and Guy.

A franchisor is the company who have allowed the franchise to use their company name E.g. McDonalds.

A Franchisee is the owner of the business who has used the company name to start their business.

The franchise owns the individual business and pays the franchisor royalty fees to use their brand, the franchisor us responsible for the franchise and the franchisee is responsible for the business. The franchisee gets the profit for his business deducting royalty fees.

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Royalty fees are fees paid by the franchisee to the franchisor for the use of their brand, Usually a percentage of sales.

The Post office is a well-known franchise. The Franchise is owned by the government so they are the franchisor. Mr and Mrs Rashid bought the franchise, so they are the franchisees.

There are many advantages and disadvantages for the franchisor, The Post Office, and the franchisees, Mr and Mrs Rashid. The advantages for The Post office, is that they get continuous amounts of royalty fees from the franchisee. More Franchisees they gain, are spreading their ...

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