CHAPTER 17 – TYPES OF BUSINESS Privatisation In pairs, research another Irish state-sponsored body that has been privatised.
• Does it have a new name? • Is it still Irish-owned? • Has the service it provides changed at all since privatisation?
FEATURES OF A FRANCHISE
A franchise is a licence agreement that allows a person to sell an existing business’s goods or services in a particular location. In return for setting up an outlet of the business, the person receives a percentage of the profits. Many well-known businesses are franchised, including fast food restaurants, convenience stores and gyms. For example, Eddie Rocket’s, Centra and Anytime Fitness.
The business granting the licence is called the franchisor. The person setting up the outlet is called the franchisee.
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A franchise is a licence agreement that allows a person (the franchisee) to sell an existing business’s (the franchisor’s) goods or services in a particular location, in return for a percentage of the profits.
Setting up a franchise is less risky than starting a new company as the business is already well known and proven to work. However, the franchisee is restricted by the established business model.
Franchisors provide support, such as marketing and staff training, which saves the franchisor money. However, a percentage of profits is given to the franchisor.
