Franchising
What is a franchise?
A business model where a franchisor licenses its brand and system to a franchisee
Name the two main types of franchises.
Product distribution franchise and business format franchise.
Name one advantage of being a franchisee.
Access to a proven business model and brand recognition.
How many franchise-owned outlets are there in the UK?
Over 8,000 outlets.
What is retailing?
Selling goods or services directly to consumers for personal use.
Who is the franchiser?
The company that owns the brand
Which type of franchise model do fast food chains usually use?
Business format franchise.
Name one disadvantage of being a franchisee.
High initial investment and lack of full independence.
Which franchise has the most units in the UK?
Subway.
What is “shoppertainment”?
Combining shopping with entertainment to create an experience.
Who is the franchisee?
The person who buys the rights to operate under that brand.
Which industry often uses product distribution franchises?
Automotive (e.g., car dealerships).
Why do big corporations like McDonald’s choose the franchise model?
It allows rapid expansion with lower financial risk.
What is the typical cost of opening a Subway store?
Around £100,000–£250,000.
What does “flagship store” mean?
The main or most important store of a brand, often in a prime location.
What is a royalty fee?
A regular payment from the franchisee to the franchisor, usually a percentage of sales.
What is the difference between online retail and brick-and-mortar retail?
Online retail sells via the internet; brick-and-mortar sells in physical stores.
Name one disadvantage of physical stores.
Higher operating costs and limited opening hours.
What trend is changing the UK retail market?
Growth of online shopping and experiential retail.
What is an omnichannel strategy?
A retail approach that integrates online and offline shopping experiences.
What is the Franchise Disclosure Document (FDD)?
A legal document that provides details about the franchise, fees, and obligations.
What is a department store?
A large store offering a wide range of products in different sections
Why do retailers add entertainment to their stores?
To attract customers and create memorable shopping experiences.
Why are retailers focusing on customer experience in the UK?
To compete with online shopping and build customer loyalty.
What is the “experience economy” in retail?
It is the idea that retailers must offer memorable experiences, not just products, to attract customers.