LESSON 2

Franchising

Franchising is based on a marketing concept which can be adopted by an organization

as a strategy for business expansion. Franchiser licenses its know-how, procedures,
intellectual property, use of its business model, brand; and rights to sell its branded
products and services to a franchisee. In return, the franchisee pays certain fees and
agrees to comply with certain obligations.

Thirty-three countries have laws that explicitly regulate franchising, with the majority of
all other countries having laws which have a direct or indirect effect on franchising.
Franchising is also used to enter a foreign market.

There are three important payments are made to a franchisor: (a) a royalty for the
trademark, (b) reimbursement for the training and advisory services given to the
franchisee, and (c) a percentage of the individual business unit's sales.

According to Jeff Elgin, the CEO of FranChoice Inc., there are 10 reasons to select a
franchise opportunity if you want to own your own business. ( From Wikipedia, the free encyclopedia).

1. Track Record of Success. Any good franchise company has developed a method of
doing business that works well and produces successful results. Even better, they're
required to provide you with a great deal of information in their required open
information, so you can investigate and verify the results with existing franchisees
before you make your final decision.

2. Strong Brand. One of the biggest advantages of franchising is that the company is
building a brand on a regional or national basis that should have value in the eyes of
customers you are trying to attract.

3. Training Programs. A good franchise company has training programs designed to

bring you up to speed on the most successful methods to run the business. They
should also have reference materials to assist you in dealing with whatever comes up
while you're running your business.

4. On going Operational Support. Franchise companies have staff dedicated to

providing on going assistance to franchisees. You're not alone when you're building
and running your business, and you can always call on experienced people when you
hit a rough spot or want to share new ideas for growing the business.

5. Marketing Assistance. The franchise company has marketing assistance to provide

you with proven tools and strategies for attracting and retaining customers. Usually,
the staff helps you develop the actual marketing plans and budgets for your grand
opening as well as your ongoing efforts to market your business effectively.

6. Real Estate Assistance. Most franchises have manuals and other documentation, as
well as staff, to help you find the right site and negotiate the best possible deal on
 your site. This is a very important advantage that can hold costs down and provide
the best possible chance of success in any site-driven business.

7. Construction Assistance. Franchise companies can also provide a wonderful benefit

in helping you design the layout of the business and select the right contractors to do
your build out, as well as making sure you get the exact mix of furniture and
equipment you need to maximize the efficiency of your initial investment.

8. Purchasing Power. A good franchise can take advantage of the buying power of the
entire system to negotiate prices for everything you need at significantly lower levels
than you could achieve as an independent operator. This applies not only to initial
furniture and equipment purchases, but also to the supplies, inventory, uniforms and
everything else you'll need on an ongoing basis.

9 & 10. Risk Avoidance. This one is so important that we'll call it both 9 and 10! The
biggest reason to buy a franchise is that, if you're smart, it will help you avoid much of
the risk of starting a new business.

I. Reading Comprehension
Read the above passage carefully and answer the following questions by
completing the following unfinished answers. The answers of the questions no 1 to
no 6 will be the summary of the above passage, so after finishing writing the
answer then prepare yourselves for retell the summary in a group. Make sure that
each member tell at least the summary of on paragraph.

1. What kind of concept is franchising

Franchising is…………..
2. What is the difference between franchiser and franchisee, according to you?
According to us the difference…………………..
3. What does a franchiser allow the franchisee to use”
A franchiser allows………………
4. What does the franchisee give to the franchiser for its branded products and
services?
The franchisee gives………………….
5. What kind of regulation do most of countries have?
Most of countries have…………………
6. What have any good franchise company developed?
Good franchise company……………..
7. How important is training program for you? What are the importance?
For us training program is………..the important thinks is…………….
8. Why is marketing assistance important?
Marketing assistance is important, because……………….
9. What kind of assistance is the activity of design layout of the business location
and choosing a good furniture for your business venue?
The activity of design………………………..
II. Structure and Written Expression
Structure and Written Expression
A. Personal Pronoun:

Personal Pronoun is
To remind you what and how to use pronouns, please study further the use of
relative pronouns given bellow.

subjects objects possessive possessive

adjective pronouns
He him his his
She her her Hers.
It it its its
They Them their Theirs.
we us our rs
I me my mine
you you your yours

Exercise 1
Make sentences using the following Personal Pronoun
1. He 2. Him 3. His 4.she 5. Her
6. hers 7. It 8. They 9. Them 10. their

11. we 12. Us 13. Our 14. Ours 15. You

16. your 17. Yours 18. Me 19 my 20 mine

Exercise 2
Students are given an exercise how to use Personal Pronouns.
Example:
Choose the correct answers by blackening to the circle in the answer sheets.
1. ….. create various products of chemical (A. they B. It C. He, D. She E. him)
2. The chemist tries to complete….. job well ( A. him B. he. C. his D. his E.
them).

A. Telling your Opinion related with the passage

The opinion related with the subject of the passage.

Answer the following questions using your own opinions. You may write your
opinion first before telling them.

Example:
Why are you studying business administration? explain your answer.
Answer:
 I am studying business administration because I want to be an entrepreneur. To
be a good and success entrepreneur, someone should know how to manage a
business, and in this campus I hope I can study a lot about how to manage a
business.

1. What does franchising business mean, according to your opinion and give
some examples. ?
2. Do you think that franchising business is more secured then private
business? explain your answers
3. What are the advantageous and disadvantageous of doing franchising
business? Explain your answer.

B. Assignment
1. Make a presentation about one of the subjects which you have studied in the
Study Program ABO.
a. choose one of your lecturing subject which your have studied before for
example. marketing mix, how to be an entrepreneur, international trade,
etc.
b. Prepare presentation slides for your guidance in delivering the
presentation.
c. Make sure that you have learnt to deliver your presentation before telling
in front of class.
d. Make sure that every member has a turn to tell the presentation.
e. Use Google translate if you find difficulties in making sentences.
f. Choose one of the members to be the moderator of the presentation.

2. Discussion about an interesting article or video

a. Find a good article or video related to the above reading passage in
internet, Copy the article or record the video and study the article or
video as well as possible in order that each member of your English
group understand the content of the article or video
b. Discuss the article or video with your group. Make preparation first before
telling the summary of the article or the video.
c. The following questions may be used as a discussion guides.
1). Article
 What does paragraph one tell about
 What does paragraph two tell bout
 What does paragraph three tell about
 What does paragraph four tell bout
 What does paragraph five tell about
 What does paragraph six tell bout

2). Video
 What does the video tell about?
 What is your opinion about the video? the picture, the duration, the
speed of English used. etc.
 What does the video tell about?
 What is your comment the content of the video?
 What lesson can you obtain from the video.?