Task 1. Rearrange the words so that they make questions. Find these questions in the text and check yourself.

1. you business Should from a start scratch?

2. existing from business Should an you buy owners?

3. a buy you Should franchise?

4. other your owners Are competition or associates franchise ?

5. you Do special operate skills to a need franchise?

6. you is looking something Are that uniquely for yours?

7. you to simply show want run the Do, regardless if it's by someone else's rules?

8. select you business How the franchise do?

9. working hiring the public with and you late, managing Do employees hours, and dealing like?

10. them help assist Did the initial set-up location decision, and the franchisor with with?

11. about the of the efforts franchisor promotional What?

12. the investment their individual benefit franchisees Does from?

13. they any say Do in spent how the advertising get dollars are or allocated?

14. the training appear Does to be thorough program?

15. the look market Does strong?

16. there too your many Are franchised locations in existing area?

17. there area locations in no your Are?

18. own franchise you Are still buy a, you your when boss?

Task 2. In the text you are given the list of points included into the Company’s Uniform Franchise offering circular (UFOC). Read the information given below and match the paragraphs with the points from UFOC.

a)…………………………………………………………

Franchisors may restrict the goods and services offered for sale. For example, as a restaurant franchise owner, you may not be able to add to your menu popular items or delete items that are unpopular. Similarly, as an automobile transmission repair franchise owner, you might not be able to perform other types of automotive work, such as brake or electrical system repairs.

b)……………………………………………………

You can lose the right to your franchise if you breach the franchise contract. In addition, the franchise contract is for a limited time; there is no guarantee that you will be able to renew it.

Franchise terminations. A franchisor can end your franchise agreement if, for example, you fail to pay royalties or abide by performance standards and sales restrictions. If your franchise is terminated, you may lose your investment.

Renewals. Franchise agreements typically run for 15 to 20 years. After that time, the franchisor may decline to renew your contract. Also be aware that renewals need not provide the original terms and conditions. The franchisor may raise the royalty payments, or impose new design standards and sales restrictions. Your previous territory may be reduced, possibly resulting in more competition from company-owned outlets or other franchisees.

The disclosure document tells you the conditions under which the franchisor may terminate your franchise and your obligations to the franchisor after termination. It also tells you the conditions under which you can renew, sell, or assign your franchise to other parties.

Task 3. In the text you are given the list of points included into the Company’s Uniform Franchise offering circular (UFOC). Fill in the gaps with the words from the list of points or their derivatives.

a) Business …¹ /history

The disclosure document identifies the executives of the franchise system and describes their prior …². Consider not only their general business background, but their …³. in managing a franchise system. Also consider how long they have been with the company. Investing with an …⁴ franchisor may be riskier than investing with an …⁵ one.

b) …..¹

The disclosure document helps you assess the background of the franchisor and its executives by requiring the disclosure of prior …². The disclosure document tells you if the franchisor, or any of its executive officers, has been convicted of felonies involving, for example, fraud, any violation of franchise law or unfair or deceptive practices law, or are subject to any state or federal injunctions involving similar misconduct. It also will tell you if the franchisor, or any of its executives, has been held liable or settled a civil action involving the franchise relationship. A number of claims against the franchisor may indicate that it has not performed according to its agreements, or, at the very least, that franchisees have been dissatisfied with the franchisor's performance. Be aware that some franchisors may try to conceal an executive's … ³ history by removing the individual's name from their disclosure documents.

c) …¹

The disclosure document tells you if the franchisor or any of its executives have recently been involved in a….². This will help you to assess the franchisor's financial stability and general business acumen and predict if the company is financially capable of delivering promised support services.

d) … ¹

Your …², which may be non-refundable, may cost several thousand to several hundred thousand dollars. You may also incur significant costs to rent, build, and equip an outlet and to purchase initial inventory.

e) …

In exchange for obtaining the right to use the franchisor's name and its assistance, you may pay some or all of the following fees.

Continuing royalty payments. You may have to pay the franchisor royalties based on a percentage of your weekly or monthly gross income. You often must pay royalties even if your outlet has not earned significant income during that time. In addition, royalties usually are paid for the right to use the franchisor's name. So even if the franchisor fails to provide promised support services, you still may have to pay royalties for the duration of your franchise agreement.

Advertising fees. You may have to pay into an advertising fund. Some portion of the advertising fees may go for national advertising or to attract new franchise owners, but not to target your particular outlet.

f) …¹

restrictions of sales area. Franchisors may limit your business to a specific …². While these …³. restrictions may ensure that other franchisees will not compete with you for the same customers, they could impede your ability to open additional outlets or move to a more profitable location.

2. A Consumer Guide to Buying a Franchise

Introduction

Many people dream of being an entrepreneur. By purchasing a franchise, you often can sell goods and services that have instant name recognition and can obtain training and ongoing support to help you succeed. But be cautious. Like any investment, purchasing a franchise is not a guarantee of success.

The Benefits and Responsibilities of Franchise Ownership

To help you evaluate whether owning a franchise is right for you, the Federal Trade Commission has prepared this booklet. It will help you understand your obligations as a franchise owner, how to shop for franchise opportunities, and how to ask the right questions before you invest.

A franchise typically enables you, the investor or "franchisee," to operate a business. By paying a franchise fee, which may cost several thousand dollars, you are given a format or system developed by the company ("franchisor"), the right to use the franchisor's name for a limited time, and assistance. For example, the franchisor may help you find a location for your outlet; provide initial training and an operating manual; and advise you on management, marketing, or personnel. Some franchisors offer ongoing support such as monthly newsletters, a toll free telephone number for technical assistance, and periodic workshops or seminars.

While buying a franchise may reduce your investment risk by enabling you to associate with an established company, it can be costly. You also may be required to relinquish significant control over your business, while taking on contractual obligations with the franchisor.

(From the Small Business Administration)

//http://www.allbusiness.com/buying-exiting-businesses/franchising/679-1.html)

Below is an outline of several components of a typical franchise system. Consider each carefully. (Task 1, Task 2, Task 3)

Date: 2015-12-18; view: 877