- A large company that sells it's brand to people so they can start up as a known company.
- Where a franchisee pays a large company to use their name andn brand.
Advantages
- They are more likely to succeed given they choose a suitable/popular location - this is because it is already a recognised business therefore Franchisee's won't have to build a reputation for the company.
- Everything gets supplied for them by the company as it has to be their menu, uniform, logo, design etc.
- The franchisor will often pay for the marketing for the Franchisee.
Disadvantages
- They can't make their own decisions or rules because it is not their business
- The franchisee has to pay some of their profits to the Franchisor.
E.g. McDonalds, Dominoes, Specsavers.
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