Charlene Cheung the Plumber

Charlene Cheung had worked for her local builder as a contract plumber for
several years. She worked long hours and the work was irregular. Then in
September 2018 she saw the newspaper advertisement below for Plumbers ’r’
Us, a nationwide plumbing and drain-cleaning franchise.

BE YOUR OWN BOSS AT….

Plumbers’r’Us

Using her savings and a loan from the bank, Charlene was able to buy a
franchise and set up in business. Plumbers ’r’ Us provided her with a three-
week training course, a van and an electrical plumbing device that quickly
unblocks drains and pipes. She was given an exclusive right to sell her services
within a 10 mile radius, and the right to trade and advertise 24 hours a day. In
return, Charlene had to hand over 12 per cent of her profits to Plumbers ’r’ Us.

Questions

1. Explain (in your own words) what a franchise is.

2. Is Charlene or Plumbers ’r’ Us the franchisor? Explain why.

3. Is Charlene or Plumbers ’r’ Us the franchisee? Explain why.

4. List 6 advantages and 6 disadvantages to Charlene taking on the

franchise.

5. List what you consider to be the main advantages and disadvantages of

Plumbers ’r ’ Us granting the franchise.

6. Why do you think that Plumbers ’r’ Us want franchisees to buy into their
business?