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The document outlines the key roles in a franchise, identifying the franchisor as the owner of the franchise system and the franchisee as the individual or company that buys the rights to operate it. It also describes the franchise agreement as a legally binding contract that governs the relationship between the two parties. Additionally, the document highlights disadvantages of franchising, including income uncertainty, high upfront costs, and limited decision-making power for franchisees.

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krishass486
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25 views6 pages

Presented by

The document outlines the key roles in a franchise, identifying the franchisor as the owner of the franchise system and the franchisee as the individual or company that buys the rights to operate it. It also describes the franchise agreement as a legally binding contract that governs the relationship between the two parties. Additionally, the document highlights disadvantages of franchising, including income uncertainty, high upfront costs, and limited decision-making power for franchisees.

Uploaded by

krishass486
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as ODP, PDF, TXT or read online on Scribd

RETAIL

FRANCHISING
PRESENTED
. BY
802 – KHUSHI SHAh
801 – KHUSHI SHAH
802 – KHUSHI SHAH
803 – KRISH SHAH
804 – KRISH SHAH
805 – KRISHA SHAH
806 – LAKSHYA SHAH
807 – MAHEK SHAH
808 – MANAV SHAH
809 – MOKSH SHAH
810 – NAVYA SHAH
804 – KRISH SHAH
805 – KRISHA SHAH
806 – LAKSHYA SHAH
807 – MAHEK SHAH
808 – MANAV SHAH
809 – MOKSH SHAH
THE KEY ROLES IN A FRANCHISE

§ The franchisor

This is the owner of the franchise system. In exchange for payment, they
allow franchisees to sell products or services using the franchise system’s
name, brand and operating systems. The franchisor generally controls the
franchise system’s business direction.
§ The franchisee

This is the person or company who buys the rights to run a franchised
business. They must run the business according to the franchise agreement.
§ The franchise agreement

This is a legally binding contract that sets out the rules of the franchising
relationship that both the franchisor and franchisee have agreed to. The
franchisor has usually written the agreement, so the rules often favour them.
DISADVANTAGES OF
FRANCHISING
§ There’s no guarantee you’ll make an income from franchising. It depends
on whether you make enough money to cover costs. In franchising you
usually must pay fees, like royalty(opens in a new tab) and marketing
fees(opens in a new tab), even if you aren’t making a profit. In franchising
you have a lot of the same risks as a small business, but less choice and
decision-making power.
§ High upfront costs in franchising include initial franchise fees, startup costs
like renovations and equipment, and ongoing fees like royalties and
marketing contributions, making it a significant investment.
§ Example: A McDonald’s franchisee paid an initial fee of $45,000 to
purchase the franchise, plus an additional $1.5 million to $2.5 million for
startup costs.

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