Business Ownership - Franchising 1.5.4
Franchise - is when one business, the franchisor, gives another business, the franchisee, permission to trade using the franchisors name and selling the franchisors goods. Can be seen as less risky option for business start-ups, but can mean additional costs and loss of independence. Franchisee - is a business that is given permission from another business to trade using its name or goods/services in return for a fee and share of the profits. They will also be given support by the franchisor but will have less autonomy in decision making. Franchisor - is a business that sells a license giving permission to another business to trade using its name and goods/services. This allows the franchisor to grow more rapidly but may damage its reputation if standards are not maintained. Franchising is a two way relationship; The FRANCHISEE pays an initial fee to the franchisor The FRANCHISEE pays an annual fee to the franchisor The FRANCHISEE often has to buy supplies from the franc...