21世纪大学实用行业英语综合教程.docVIP

Unit 2 chain operation Text B Franchising A franchise is a right granted to an individual or group to market a company’s goods and services within a certain territory or location. Some examples of today’s popular franchises are McDonald’s, 7-Eleven, Starbucks, and FedEx Kinkos. There are many different types of franchises. Many people associate only fast-food businesses with franchising. In fact, there are over 120 different types of franchise businesses available today, including automotive, cleaning maintenance, health fitness, financial services and pet-related franchises, just to name a few. What is franchising? Franchising is a business model in which many different owners share a single brand name. A parent company allows entrepreneurs to use the company’s strategies and trademarks; in exchange, the franchisee pays an initial fee and royalties based on revenues. The parent company also provides the franchisee with support, including advertising and training, as part of the franchising agreement. Franchising is a faster, cheaper form of expansion than adding company-owned stores, because it costs the parent company much less when new stores are owned and operated by a third party. On the other side, potential for revenue growth is more limited because the parent company will only earn a percentage of the earnings from each new store. Seventy different industries use the franchising business model, and according to the International Franchise Association the sector earns more than $1.5 trillion in revenues each year. Thirty-three countries, including the United States, China, and Australia, have laws that explicitly regulate franchising, with the majority of all other counties having laws which have a direct or indirect impact on franchising. How Franchising Works? The franchising business model consists of two operating partners: the franchisor, or parent company, and the franchisee, the proprietor that operates one or multiple store locations. Franchising agre