Chapter 8, Problem 18AA

To determine

To ascertain how does the franchise operate the business.

Explanation of Solution

Franchises allow investors (franchisees) to exchange a franchise fee for their name, brand, system and product. The franchisee owns and operates the local corporation, and owes the franchisor a share of income. Usually, the franchisor can give assistance and assistance in areas such as marketing, location-finding, training etc.

This offers some advantages to starting a company from scratch. Being a franchisee helps to be own boss, but it also offers a support network that wouldn't otherwise have apart from running a company.

Economics Concept Introduction

Introduction:   A franchise is a kind of license that obtained by a party (franchisee) to allow them access to a company's (franchisor's) proprietary details, processes, and marks to enable the party to sell a product or provide a service under the company name.