A-Level AQA Business Revision Unit 1(Part 4) : Franchises

A franchise is described as a person or company who has paid to become part of an established brand. Being a franchise enables the person to run their own business whilst using a successful formula created by the franchisor.

Examples of a franchise are:

• McDonalds

• Dominoes

• KFC

The UK government says that 70% of businesses fail before 3 years compared with 7% of franchises.

Franchise - A business structure where the owner gives permission to someone else to use their name and to sell their product

Franchisee - The person who is buying the rights to sell the product

Franchisor - The figure who sells the rights to the franchisee to sell their product

Royalties - The franchisor takes a percentage of the revenue made by the franchisee