45 FRANCHISING 1 MISSING WORDS STARTING A BUSINESS IS

PRÊMIO ABF DESTAQUE FRANCHISING “CATEGORIA JORNALISMO” REGULAMENTO ARTIGO
45 FRANCHISING 1 MISSING WORDS STARTING A BUSINESS IS
ACCC REPORT SMALL BUSINESS FRANCHISING AND INDUSTRY CODES

ADMINISTERING THE FRANCHISING CODE OF CONDUCT ACCC CHAIRMAN
THE EFFECT OF FRANCHISING ON PERFORMANCE AN EXAMINATION OF

67

45. Franchising.

1. Missing words

Starting a business is very __________, even for experienced businesspeople. For those starting their first business, it can be wise to take a half-way step, by buying into a _____________. Instead of having to make every decision yourself, the franchise owner will tell you how to set up many of the key services or systems. And, if you have ____________________ carefully, you will have bought into a franchise with a good track record of sales success.

Missing words from: franchise, researched, risky

2. Multiple Choice

Shama is interested in fashion, she loves shoes. Shama wants to open her own shoe shop but lacks business experience. She has found out that most of Clarks Shoe Shops are owned by 50 franchise businesses.


2.1 Select the two most likely reasons that Shama might want to buy a Clarks franchise.

  1. Shama will be able to receive thorough training provided by Clarks

  2. Shama is able to pay a percentage of her revenue to Clarks

  3. Shama will find it easier to borrow money from the bank to set up her business

  4. Shama will have flexibility in how she runs her businesses

  5. Shama will be able to change to new, cooler brands as fashions change


2.2 If Shama had to pay 10% of her royalties to Clarks and her turnover was £380,000 in her first year, how much

would she be paying to Clarks?

  1. Nothing, they want a share of the profits

  2. £38000

  3. £3800

  4. £370,000

  5. £3799900


3. Unscramble these common franchise businesses names.

3.1 A Din Zips Zoom (clue, you can even order online!)

3.2 Young It (you’ll look great when they’ve finished)

3.3 Aw By Us (they can be really long)

3.4 Inland Hi Yo (we all deserve a break sometimes)

3.5 Eg Grub Rink (don’t tell whoppers)

4. Select the correct answers

4.1 All but one of the following are reasons why franchising is a successful way for the franchise owner to grow. Which one is not a benefit?

a) It allows the business to grow rapidly

b) The person buying into the franchise provides the finance, reducing the investment cost of expanding

c) Poorly run franchise outlets can ruin the brand’s good name.

d) The franchise owner benefits from the royalties paid by the small business franchise holders.

4.2 All but one of the following are benefits of buying a franchise. Select the one incorrect statement.

a) The business should have an existing customer base so failure should be less likely

b) Easier to raise money from bank to buy a franchise

c) National advertising is organised by the franchise-owner

d) A franchise business will receive a higher profit than an Independent business operating within the same industry.


45. ANSWERS – Franchising


1. risky … franchise … researched


2.1 a and c

2.2 b


3.1 Domino’s Pizza

3.2 Tony and Guy

3.3 Subway

3.4 Holiday Inn

3.5 Burger King


4.1 c

4.2 d


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