What is a Franchise?

By Emma Roberts

How does a franchise work?

• A franchise works by a bigger business gives another business products of theirs to sell under it’s name.

• It’s pretty understandable the smaller business has to give a certain percentage of the profits to the bigger business.

What a franchisee/franchisor?

• A franchisee is a person who purchases a franchise, then runs that location of the purchased business. The person must sell it the way the maker has it as, and pays a flat fee or percentage of revenues or profits from it’s sales.

• A franchisor is a company that sells the right to use its name/or operating systems to independent business owners.

History of Franchising

• At first franchising start in people who would brew beer in Europe. Then it soon ventured into the United States.

• In the United States, there was no food chain of businesses. Franchising later started to form the United States.

History of Franchising

• In the late 1800’s and 1900’s many other types of franchising took place. For example, oil refineries and auto manufacturers found out that they could sell their products farther than other franchises could.

Advantages of Buying a Franchise• Lower Failure Rate: when you buy a

franchise you have a better chance of success, than a stand up business.

• Help with Start up and Beyond: when you buy the franchise you don’t need the people to do training or get the equipment, since it’s already there.

Advantages of Buying a Franchise• Buying Power: the benefit from the

collective buying power can afford the franchisor to buy in bulk and pass the savings to franchisees. The inventory and supplies will cost less, than a person starting their own business.

Advantages of buying a Franchise• Star Power: having a business world

or nationally knowned, can help you since there are already customers who go there.

Disadvantages of buying a franchise• Buying a franchise means you have

an agreement with a franchisor. It dictates how you run the business, and that may cause you to not be as creative.

Disadvantages of buying a franchise• There are usually restrictions on how

or where you operate your business, and the products you sell and the suppliers you use.

Disadvantages of buying a franchise• Performances by other franchisees

can affect your franchises reputation.

Facts on a Franchise• The number of franchise establishments

currently in the United States is approximately 750,000. All of these businesses directly employ well over 8 million people combined, with Quick Service Restaurants and Table/Full Service Restaurants accounting approximately 50% of all jobs in the franchising industry.

• I believe that these franchises can help us with lowering the unemployed rate. These franchises are one of our keys to lowering the unemployment rate.

Facts on a Franchise

• There are over 250,000 possible ways to order a burger at Five Guys. The “Five Guys” behind the burger chain are actually five brothers from Alexandria, Virginia who founded the restaurant, originally a carry-out burger joint, in 1986.

• I never knew that a person could have so many choices to put on a burger that it could lead to 250,000 types of burgers. This is an example of how many choices you can have at other restaurants.

Facts on a Franchise

• AlphaGraphics became the first desktop publishing retailer in 1984. Throughout the years, the company’s business center offerings have evolved to include printing, marketing communications as well as document creation and management.

• Nowadays there are so many types of places like this.

Credits• eHow.com http

://www.ehow.com/how-does_4911632_a-franchise-work.html • Business Dictionary

http://www.businessdictionary.com/definition/franchisee.html• About.com http://franchises.about.com/od/franchisebasics/a/

history.htmhttp://franchises.about.com/od/franchisebasics/a/history.htm

• http://sbinfocanada.about.com/od/franchiseinfo/a/buyfranchise.htm

• Queensland Government http://www.business.qld.gov.au/business/starting/business-startup-options/buying-franchise/advantages-disadvantages-buying-franchise

• Franchise Direct http://www.franchisedirect.com/blog/10-random-and-interesting-franchise-facts/