day-to-day running of the business that you’ve been used to. This stage in the growth of the business may present the entrepreneur with risks that he or she is unwilling to run. However, one way of minimizing such risks, while at the same time continuing to develop and profit from a successful brand, is by franchising your business.


Section 2


So, what is franchising? Well, here is a definition from the British Franchising Association website. And it says, ‘Business format franchising is the granting of a licence by one person (the franchisor) to another (the franchisee), which entitles the franchisee to trade under the trademark/trade name of the franchisor and to make use of an entire package, comprising all the elements necessary to establish a previously untrained person in the business, and to run it with continual assistance on a predetermined basis.’ This package would include things like training, consultancy arrangements, possibly supplies, marketing on a national scale, etc., etc.


Section 3


So, for example, if you own a group of successful fast-food restaurants trading under the same name, you may decide to run your business as a franchise. You would allow other businesspeople to open their own branches of the fast-food chain, using your trademark, and in fact you would probably supply a lot of the signage and materials necessary to maintain a uniform brand. In return, the franchisee pays you, the franchisor, an initial fee, that is to say a fee paid at the beginning of the business arrangement, and also an ongoing management service fee. This management service fee is related to the volume of business the franchisee is doing, so it might be calculated as a percentage of the turnover, or as a mark-up on supplies provided by the franchisor. So there are two kinds of fee: the one-off initial fee to set up the franchise, and the ongoing management service fee.


CD1 Track 17 Ex 2.3


Listen to Part 1, Section 1 again and answer the questions.


Section 1


The form of business development I’m going to look at now is franchising. The term ‘franchising’ covers a wide range of business arrangements, but today I’m going to focus on ‘business format franchising’.


78 English for Academic Study


If you own a small or medium-sized enterprise, you may reach a stage in its development at which, in order to develop further, you need large amounts of capital, or you need to reorganize your business, or to bring into the management team new skills. Well, let’s say you own four or five hairdressing salons in your city which are very profitable. You want to expand the business, but recognize firstly that a lot more money will need to be invested, and secondly that you will not be able to exert the same amount of personal control over the day-to-day running of the business that you’ve been used to. This stage in the growth of the business may present the entrepreneur with risks that he or she is unwilling to run. However, one way of minimizing such risks, while at the same time continuing to develop and profit from a successful brand, is by franchising your business.


CD1 Track 18 Ex 2.4


Listen to Part 1, Section 2 again and answer the following questions.


Section 2


So, what is franchising? Well, here is a definition from the British Franchising Association website. And it says, ‘Business format franchising is the granting of a licence by one person (the franchisor) to another (the franchisee), which entitles the franchisee to trade under the trademark/trade name of the franchisor and to make use of an entire package, comprising all the elements necessary to establish a previously untrained person in the business, and to run it with continual assistance on a predetermined basis.’ This package would include things like training, consultancy arrangements, possibly supplies, marketing on a national scale, etc., etc.


CD1 Track 19 Ex 2.5


Listen to Part 1, Section 3 again and answer the following questions.


Section 3


So, for example, if you own a group of successful fast-food restaurants trading under the same name, you may decide to run your business as a franchise. You would allow other businesspeople to open their own branches of the fast-food chain, using your trademark, and in fact you would probably supply a lot of the signage and materials necessary to maintain a uniform brand. In return, the franchisee pays you, the franchisor,


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