Format operations manual master franchisee franchise fee

Franchising can be defined as a business system in which a company (or1....................) sells an

individual (or ^{2...........................................} ) the right to operate a business using the franchisor's established system

or ^{3..................................................} The franchisee is thus able to take advantage of the franchisor's brand names, reputation and experience.

As part of the contract (or ^{4........................................} ) the franchisee pays an initial sum of money, known as a

^{5................................................} to the franchisor and, in addition, agrees to pay a ^{6....................................} in

exchange for continuing advice and assistance which is usually calculated as a percentage of annual turnover. In

certain cases the franchisee may also pay an 7.......................... to contribute to the franchisor's annual

advertising and marketing costs. It is important to understand that the franchisee also has to find the necessary capital to open the business.

Once the contract has been agreed, the franchisor provides an ^{8................................} which is a document

containing all the information that the franchisee requires in order to manage his or her business. In some cases a

franchisor may appoint a ^{9.........................................} to supervise all aspects of the development of the business

inside a territory.

9. According to the text are the following statements true or false? Correct the false ones and comment on the right ones.

1. To open his/her franchise outlet one has only to pay the initial sum of money - the so-called front end.
2. In most European countries franchised operations account for the tenth of the volume of retail business.
3. The Paris Franchise show was held to stimulate franchising activity.
4. Benetton of Italy has led the way in European franchising.
5. For companies who want to expand into foreign markets, setting up a franchise is the safest and most profitable way.
6. At present US franchisers are investing mainly in the UK.
7. Retailing is the only perspective area in franchising business.
8. With the unified market it is safe to assume that what sells well in one European country will also sell well in another.
9. Domino's Pizza was the first American food franchise to expand into Europe.
10. Today franchising is confined to the national scope.

10. Develop the following statements with the help of your active vocabulary:

1. The principle of franchising is…
2. A franchising agreement presupposes certain regular payments on the part of the franchisee and investment on both parts.
3. Until recently franchising was not developed enough in Europe.
4. Today cross-border franchising is on the up and up.
5. Numerous companies take the franchise route to Europe via Britain and France.
6. Body Shop is one of the greatest retail successes since the war.
7. It is important to carry out a study of the market for potential future expansion.
8. Retailing is seen as the biggest cross-border franchising growth area.
9. The public should know more about the range of franchising opportunities.
10. There exist certain franchising successes in this country.

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