UNIT 9

FRANCHISING
Franchising is mean of marketing and distribution goods. The franchisor,
normally a large business, supplies the franchisee, usually an individual, with
products of services for sale to the public. The franchisee pays for the right to
sell the product or service in a certain area ,and also makes annual payments-known as royalitiesto the franchising company.
This type of business has always been popular in the United States. It
developed particularly in the 1950s and 1960s when there was boom in fast-food
restaurants such as McDonalds and Kentucky Fried Chicken. Now about one-third
of all retail sales in the US are trought franchised outlets, and there are about
500,000 enterprise operating in this manner
The system is spreading quickly troughtout the world . in Europe
companies using farnchising include : Wimpy International (fast-food); Day villes
(ice cream); Budget Rent-a-Car (car hire); Pronuptia(wedding dresses); Ziebart
(car rust-proofing). Other countries are beginning to follow Europes example.
China is producing and bottling coca cola under a franchise agreement with the
American company.
It is not surprising that franchising is growing fast. If it works properly, it
has advantages for both side. The franchisor is able to expand his business
without reducing his capital or borrowing money. Another advantage is that the
franchise holders will probably be hard-working. This is important, espescially in
fast-food outlets where the hours of opening are long.
The franchisee gain from the arrangements as well. Franchisees are
usually interested in business, but do not have much experience or capital. They
want to work for themselves, but are afraid to take to many risk.
To purchase a franchise, they may have to pay 20,000-30,000 --part of
which they can borrow from a friendly bank.
For their investment, franchisees buy the right to use the trade name of
the franchisor, and they get advice about running the business. Also the
franchising company will provide them with training, materials and equipment.
They will be able to take advantage of the companys specialized knowledge and
its ability to buy in bulk. Finally, the franchisor will likly be promoting the brand
name of the business with national advertising.
The franchising system give people the change to set up in business
without taking great risk. If they choose franchise wisely, they will have the
opportunity to make a small fortune.

A.Comprehension
1. Explain the meaning of these word or pharses:
(i)
Franchisor

2.
3.
4.
5.

(ii)
Franchise
(iii)
Fast-food outlet
(iv)
Brand name
(v)
Buy in bulk
What fact show that franchising is becoming popular?
Why do companies use franchising to expand their business?
Why do people buy franchise?
What the problem, do you think, of (a) being a franchising company,(b)
running a franchise?

B. Vocabulary
Complete the sentence using the word in italic. ( Make any change
necessary)
Investment outlet
franchise
capital
retail
promote
Royalty
purchase
boom
distribute
a)
b)
c)
d)
e)
f)
g)
h)
i)
j)

Franchised business are very common in the . . . trade

Many fast-food . . . are run as franchise
You must pay a lot money to buy the . . . of a big hotel.
The annual . . . which a franchisee pay is usually a percentage of profits
or turnover.
Many company decide to . . . their goods by offering franchises to
investors.
It is wise ge advice before you . . . a business
Franchises appeal mostly to peoplewho have limited . . . to invest in a
business.
In recent years, fast-food businesses have become popular in britain.
No one know how long the . . . will continue
A franchise can be good . . . for a person with little business
experience.
Franchising company generally spend a lot of money . . . their goods.