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Student's Book Form Five
Exercise 2.2 specified guidelines. It is important for
anyone planning to start a business by
1. Mr. EGM completed Form IV becoming a franchisee to remember that
in 2004. Since then, he has been in franchising, the franchisee is bound
employed in his brother’s restaurant to an agreement with the franchisor for
as a manager. Now, he would like a defined period. Franchising is meant to
FOR ONLINE READING ONLY
to establish a company that will spread business in areas where the original
supply home appliances. However, owner is unable to reach. Some examples
he is not well informed on the of the franchises found in Tanzania include;
basic requirements for company Kentucky Fried Chicken (KFC), and
formation. How can you help him? Subway which are American fast-food
2. As a knowledgeable person in chains that are operating in Tanzania.
company management, how would
you articulate the mechanisms Advantages of franchise
through which shareholders The following are the advantages of the
influence decision-making franchise:
processes within a company? Business operations assistance: Depending
3. Suppose you are a worker of a on the terms of the franchise agreement and
particular company: the structure of the business, the franchisee
(a) How will you perceive the might receive significant assistance in
key responsibilities of the business operations. The assistance may be
board of directors in corporate in form of equipment, supplies, marketing
governance? support or plans to operate the business.
(b) How will you contribute to ensure Profit: In general, franchises receive
accountability, transparency, and higher profits than independently
strategic direction within the established businesses. Most franchises
company? have recognizable brands that bring
customers from different countries. This
popularity results in higher profits.
Franchise Customer base: Franchises have access
A franchise is a business in which the owner to instant brand recognition and a loyal
of a business system (the franchisor) grants customer base. Even if the branch of a
an individual or group (the franchisee) the franchise is opened in a small town, the
right to run a business using the franchisor’s likelihood is that potential customers
business system for a fee and/or some share are already familiar with the brand from
of income generated. Franchisees are also exposure to commercials or travel to other
permitted to use the franchisor’s branding, cities.
trademarks, and identification marks under
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