DoRevision Sign up free

Franchising

That coffee chain in every town is often a franchise. Learn how franchising works, what the franchisor and franchisee each give and gain, and how to weigh it up for a real business.

⏱️ 16 min 🎯 14 activities Teachers Not yet rated Students Not yet rated

Revise this, the fun way

Play it interactively, earn XP and build a streak, free.

Start revising free

What you'll cover

The shop on every high street 🏪

That coffee chain with branches in every town is often a **franchise**. One company owns the brand, and local owners pay to run their own branch of it. This module looks at how franchising works, and who gains and who loses from it.

Words to know 🔑

Four words unlock this topic:

Who owns the brand? 🎯

In a franchise, who owns the brand and the way the business is run?

  • The franchisor
  • The franchisee
  • The customer
  • The government

Two sides of a franchise ⚖️

A franchise is a deal between two sides.

Match the term 🔗

  • Franchise
  • Franchisor
  • Franchisee
  • Royalty
  • A licence to trade under an established brand
  • The company that owns the brand and grants it
  • The person who pays to run a branch
  • A regular payment based on how much the branch sells

The deal in a nutshell 💡

The franchisee gets a proven brand, training and support, which lowers the risk of failing. In return the franchisee pays an initial fee to join and ongoing royalties from sales, and must follow the rules the franchisor sets.

Open a franchise 🪜

An interactive activity.

Perks for the franchisee ✅

Which THREE are advantages for the FRANCHISEE?

  • Starts with a brand customers already trust
  • Gets training and support from the franchisor
  • Finds it easier to get a bank loan
  • Keeps all of the profit with no fees
  • Can change the whole business however they like

Work out the royalty 🔢

An interactive activity.

Complete the idea 🧩

A franchise lets a _____ trade under an established brand owned by the _____. To join, the franchisee pays an initial _____, and then pays ongoing _____ based on sales. The big advantage is starting with a brand that customers already _____.

franchisee franchisor fee royalties trust customer brand profit ignore loss

True or not? 🖍️

An interactive activity.

Advantage or drawback? 🔀

  • Starts with a brand customers already trust
  • Must pay royalties and follow strict rules
  • Can expand quickly without funding every branch
  • A poorly run branch can harm the whole brand
  • Advantage for the franchisee
  • Disadvantage for the franchisee
  • Advantage for the franchisor
  • Disadvantage for the franchisor

Franchise or not? 🧭

An interactive activity.

Should they franchise? ✍️

An interactive activity.