What is a franchise? An arrangement that allows one to purchase the right to sell the goods or services of another. franchisee. a person who buys the right to sell the product.
What is a franchise economics quizlet?
franchise. business that licenses the right to sell its products in a particular area. franchisee. a semi-independent business that buys the right to run a franchise (pays a fee to the parent company in return for the right to sell the company’s products or services in a particular area)
Which business is an example of a franchise quizlet?
a system of franchising in which a franchisor licenses a franchisee to sell its products under the franchisor’s brand name and trademark through a selective, limited, distribution network. Examples include automobile sales like Chevrolet, or gasoline such as Exxon Mobil.
How does a franchise work quizlet?
How does a franchise operate? involves the owner of a business licensing to a 3rd party the night to operate a business goods and or services using the franchisors business name. … every business involves expenses, receipts, and record keeping.
What are the advantages and disadvantages of a franchise?
Advantages and Disadvantages of Buying a Franchise
|Franchising Pros||Franchising Cons|
|Low supplies costs||Restrictions on where you can operate, the products you can sell, and the suppliers you can use|
|Some franchisors offer loans and other forms of assistance to franchisees||Expensive initial investment for big name franchises|
What are the advantages of a franchise?
There are several advantages of franchising for the franchisee, including:
- Business assistance. One of the benefits of franchising for the franchisee is the business assistance they receive from the franchisor. …
- Brand recognition. …
- Lower failure rate. …
- Buying power. …
- Profits. …
- Lower risk. …
- Built-in customer base. …
- Be your own boss.
What is a disadvantage of having a franchise quizlet?
Franchisor may fail to build brand. Franchisee may fail to maintain outlet. It’s relatively easy to change structure among company-owned outlets. All franchisees must be treated the same.
What is the role of a franchisor when a franchise is purchased?
The franchisor owns the brand and the operating system that they license to their franchisees. … The franchisor grants the franchisee the right to operate the business under the franchise system’s trademarks and service marks and enforces the brand standards of the system.
What is an advantage of buying a franchise quizlet?
What are the benefits of being a franchisee? The benefits include getting a nationally recognized name and reputation, a proven management system, promotional assistance, and pride of ownership.
What are two types of franchises?
There is a wide variety of types of franchise structures used in the industry today. There are two main types of franchising, known as Product Distribution Franchising (Traditional Franchising) and Business Format Franchising, which are conducted under a variety of franchise relationships.