Now read the questions and match them with the replies.

a How much is the fee for continuing support services?

b What about store design and fixtures?

с How long does it take to open a The Sport Shoe® franchise?

d Does The Sport Shoe® offer financial assistance?

e How much training will I receive?

f What about advertising?

g How do I get my opening inventory?

h What is the anticipated start-up cost for a The Sport Shoe® store?

 

Task 4. Decide if the following statements refer to the franchiser (FR), the franchisee (FE) or the information is not given in the text (NG).

1. Receives a small percentage of total sales. ___________________

2. Pays an initial fee of $25, 000. ___________________

3. Provides marketing assistance. ___________________

4. Seeks individuals with business qualifications. ___________________

5. Buys inventory directly from suppliers. ___________________

6. Offers assistance in opening vendor accounts. ___________________

7. Runs training courses for store employees. ___________________

8. Has a minimum of $250,000 cash to invest. ___________________

9. Must cover monthly advertising expenses. ___________________

10. Does not charge for renewing the franchising agreement. ___________________

 

Task 5. Vocabulary. Make nouns by adding a suffix(-ity, -ness, -ment, -tion)to the words below.

You should also make any necessary spelling changes.

a) flexible ____________ e) invest ____________

b) dedicate ___________ f) communicate ____________

с) popular ____________ g) agree _____________

d) fit ____________ h) aware _____________

Complete the sentences below with the nouns from the exercise above:

1. The increasing ___________of home entertainment amongst

consumers is fuelling the expansion of the home video rental industry.

2. We are meeting next week to sign the lease ___________ for the

shop.

3. Growing ____________ of the stress-reducing benefits of regular

exercise has led to an increase in gym franchises.

4. Franchisers will only consider candidates who can make an initial ___________of at least $85, 000.

5. Employees who take initiative and constantly seek ways to improve service are rewarded for their ____________.

6. Some companies have on-site exercise facilities as they believe that physical ______________ plays an important role in the well-being of the employees.

7. Running your own business requires a lot of ________________as you

often have to do whatever is needed to be successful.

8. E-mail makes ______________ with franchising associates around the

world faster, more convenient and less expensive.

 

Task 6. Give Russian equivalents for the following phrases:

the average start – up costs;

utility deposit;

lease hold improvements: initial inventory;

signage;

working capital;

to provide direct financing;

to have a working knowledge of the franchise program;

to assist with financing needs;

the continuing services; royalty fee;

the fee entitles you to the continued use of the trademark;

opening inventory;

to make buying decisions;

vendor accounts;

to select a site;

a fixture inventory sheet;

to build name recognition;

to be consistent with;

directly from the appropriate supplies;

a designated employee;

to participate in an initial training course;

instructions on store operations, personnel policies; merchandising and accounting;

to provide additional onsite training;

to expedite the process.

 

Task 7. Read and translate without using a dictionary:

Let’s have a look at the roles of the franchisor and the franchisee. In most cases the franchisor usually supplies seven things.

Firstly, an established product or service and a well-known brand image. And then he’ll supply an operating manual, showing how the business should be set up and run.

He’ll also supply help, advice and training in setting up the business. He’ll normally give continuing advice and training during the life of the franchise. And then he’ll normally supply all the equipment that’s required to set up the business.

Then he’ll continue to supply a stock of the product, which he’ll be able to obtain cheaply in bulk. This may result in savings, or depending on the franchisor’s mark up, commit the franchisee to buying at above market price.

And lastly, he’ll be responsible for local, national and even international advertising.

It’s important to emphasize that the on-going support may vary a lot from franchise to franchise. The brand image of the product and the level of help you get at start-up are visible. But what is likely to happen after, say, twelve months of operating the franchise is much harder to forsee.

If things go wrong and your profits are low, you need to know what kind of help you’re likely to get.

Do the franchisor’s advisers or trouble-shooters visit regularly?

Do they have a mobile back-up team to take over in an emergency?

There are many other aspects of continuing support.

You need to know if there will continue to be refresher courses to retrain staff – and if there are, will these courses be good and how much will they cost?

You’ll also want to know if the franchisor is devoting part of his profits to on-going research and development of the product. And you also want to be sure that, if he’s charging you a levy for advertising, that this money is actually being spent on advertising.

Now, if we look briefly at the other side of the operation:

What the franchisee brings to the business.

The first thing he brings is capital: he has to pay a capital sum to buy the franchise for a particular territory. He also has to pay a monthly fee to the franchisor, this is usually based on percentage of sales – not profits.

There may also be an advertising levy.

He also has various commitments under the terms of his contract, some of which have a good side and a bad side. For instance, he is committed to following the franchisor’s methods. Also he can’t sell the franchise without the franchisor’s agreement. He is also obliged to show the franchisor all his documents and sales figures.

 

Answer the following questions:

What things does the franchisor usually supply?

What comes first in the business relations?

What kind of continuing advice is expected during the life of the franchise?

On what terms does the franchisor supply a stock of the product?

What else is he responsible for?

Does the on-going support follow a set pattern?

What might happen if things go wrong?

What things should franchisees find out about other aspects of continuing support?

What does the franchisee bring to business?

What commitments does the franchisee have under his contract?

 

Task 8. Translate into English:

Франчайзор – это собственник торговой марки, торгового имени или авторского права, позволяющий на определенных условиях использование своего имени, прав и марки другой фирме.

Предоставление своего имени или торговой марки для использования другой компанией имеет свои преимущества и недостатки.

Преимущества:

1. Рост собственного капитала за счет платежей, поступающих от франчайзи, а также за счет перекладывания на него операционных издержек.

2. Экономия за счет масштаба производства. (Economy of scale).

Франчайзор имеет возможность расширить производство, поскольку нет необходимости вкладывать капитал в открытие филиалов.

3. Большая мотивация и ответственность франчайзи за состояние дел.

4. Отсутствие трудовых конфликтов, поскольку для франчайзора франчайзи не является наемным рабочим.

Недостатки:

1. Необходимость в некоторых случаях кредитовать франчайзи, что может несколько снизить возможности увеличения собственного капитала.

2. Издержки по контролю качества, связанные с обучением франчайзи и содержанием проверяющих.

Франчайзи – это собственник, использующий на определенных условиях чужую торговую марку, имя, авторское право для ведения собственного дела.

Как правило, таким собственником мелкое предприятие, находящееся в единоличной собственности (sole proprietorship) или в собственности товарищества (partnership).

Использование чужого торгового имени и торговой марки имеет свои преимущества и недостатки.

Преимущества:

1. Помощь в управлении. Основной причиной банкротств малых предприятий является плохое управление, поэтому для франчайзи важно, что они используют уже проверенную предпринимательскую идею.

Во-вторых, франчайзи часто получают специальную подготовку и франчайзор предоставляет детальные руководства и поддержку в повседневной деятельности.

2. Готовый маркетинг. Франчайзор предоставляет не только советы, но и исследование рынка, а также разработанные им новые продукты.

3. Финансовая помощь. Многие франчайзоры финансируют стартовые издержки своих франчайзи, предоставляют краткосрочные кредиты.

Недостатки:

1. Необходимость делиться прибылью. Платежи франчайзору принимают форму либо процента от продаж, либо включаются в цену поставляемых от франчайзора товаров.

2. Снижение независимости. Франчайзор обычно настаивает на четком соблюдении стандартов и неодобрительно относится к сокращению издержек за счет упрощения операций.

Task 9. Translate into Russian. Use a dictionary if necessary.