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Business Studies

franchisor grants a licence (the "franchise") to another business (the "franchisee") to allow it to trade using the brand or business format.

Franchises are a significant part of business life in the UK:

• Franchises generated annual sales of £12.4 billion in the UK in 2007

• There are over 800 different franchised business formats in the UK and that number is rising by around 5% each year

• The average sales turnover per franchise outlet is £360,000

• 90% of franchises are reported to be profitable

• A franchise has average borrowings of £70,000, suggesting that banks are happier to make loans to franchise businesses than other start‐ups


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