X. Oral practice

Exercise 22. Fill in the table and be ready to speak:

Exercise 23. Discuss another ad and ads of corporations.

XI Reading

Exercise 24. Read the text D:

Text D

Franchising

A very interesting form of business is franchising, because it combines some advantages of both corporations and small businesses, such as sole proprietorship or partnership. In franchising, a large company (corporation) allows one or several entrepreneurs (franchisees) to use the corporate brand name. But in return, a franchisee has to pay the company a part of her or his profits and also must observe the company's format. For instance, most McDonald's restaurants around the word are owned by franchisees with the McDonald's corporation as a franchiser. All the McDonald's fast food restaurants are practically identical whether they are owned by the corporation itself or by franchisees. That is the corporation's format that all franchisees have to observe.

Franchisees get training from the company that helps them manage their business and advertising. This continuous support is one of great advantages of franchising. Not less important is using the brand name of a company that is known and advertised nationally, or even worldwide. It is easier for a franchisee to raise money from banks than it is for a sole proprietor, because a franchisee has a large company's support. But there are disadvantages as well:

• a franchisee has less independence than other sole proprietors;

• he or she has to pay a part of his or her profits to the company (royalty payments);

• a franchisee cannot sell his or her business if he or she does not have a franchiser's agreement or doing so;

• renewal of the franchise is not automatic, so a franchisee can lose his or her franchise.