Business Lesson 10
New Vocabulary
franchise holder
владелец франшизы
to resign a franchise
отказаться от франшизы
franchise agreement
договор франшизы
авторский гонорар
торговая марка
UFOC (Uniform Franchise Offering Circular)
Единый циркуляр о предоставлении франшизы
franchise fee
доход, сбор по договору франшизы
master franchisee
Главный пользователь франшизы
законодательство, закон
intellectual property
интеллектуальная собственность
industrial property
промышленная собственность
авторское право
service mark
знак обслуживания
to conform
соглашение, договор
advertising fee
рекламный гонорар
агент; представитель
gross sales
валовый объем продаж
International Franchise Association (IFA)
международная франчайзинговая ассоциация
management services fee
Оплата консультационных услуг по управлению
front end fee
master franchise
Главный контракт франчайзинга
operations manual
руководство по эксплуатации
to conform to the standards of quality, service, cleanliness and value
Соответствовать стандартам качества, обслуживания, гигиены и цен
бизнесмен, предприниматель
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A franchise is the agreement or license between two legally independent parties which gives:

• a person or group of people (franchisee) the right to market a product or service using the trademark or trade name of another business (franchisor)
• the franchisee the right to market a product or service using the operating methods of the franchisor
• the franchisee the obligation to pay the franchisor fees for these rights
• the franchisor the obligation to provide rights and support to franchisees
Types of Franchises
Product distribution franchises simply sell the franchisor's products and are supplier-dealer relationships. In product distribution franchising, the franchisor licenses its trademark and logo to the franchisees but typically does not provide them with an entire system for running their business. The industries where you most often find this type of franchising are soft drink distributors, automobile dealers and gas stations.

Some familiar product distribution franchises include:
✔ Pepsi
✔ Exxon
✔ Ford Motor Company

Although product distribution franchising represents the largest percentage of total retail sales, most franchises available today are business format opportunities.

Business format franchises, on the other hand, not only use a franchisor's product, service and trademark, but also the complete method to conduct the business itself, such as the marketing plan and operations manuals. Business format franchises are the most common type of franchise.

USA Today reported that the 10 most popular franchising opportunities are in these industries:
◆ fast food
◆ retail
◆ service
◆ automotive
◆ restaurants
◆ maintenance
◆ building and construction
◆ retail—food
◆ business services
◆ lodging
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Listen to a telephone conversation between a lawyer, Mr Howard, and a new client, Professor Daykin.
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Read the article written by Devin Haman, the CEO and Co-Founder of Beverly Hills Rejuvenation Center, the nation's leading medical spa franchise.
Seven Steps To Running A Successful Franchise
Many business owners want to run a franchise, and for good reason. You have your own business, but you're also buying a business system — one that you know works. Instead of starting a business that could bomb in a few months or years, you're buying a business that has worked elsewhere and presumably will work in your community.

But obviously, just because you buy a franchise doesn't mean you'll be successful. Franchise owners can fail especially, I believe, if they become too confident and think the system is going to do all the work for them. The franchise owner has to bring something to the table, too.

As co-founder of a medical spa franchise, I'd like to think that I might have some helpful advice for any prospective owner wondering if he or she has what it takes to run a franchise. So if you're thinking of franchising a business or just starting out, keep these universal key steps in mind.

1. Be Passionate About Your Product Or Service

That may sound like a given, but we've all met plenty of people who are at the top of their game yet don't seem all that excited about what they're doing. It's certainly possible to run a successful company and be more interested in the mechanics, such as infrastructure and inventory numbers and profit margins, than what type of business you run. But if you're passionate about your clients — say you love pets, and you run a pet care service — I think that energy and enthusiasm you'll naturally bring is always going to translate into a better product or service for your clients and customers.

2. Find Out Whether Your Community Needs This Franchise

We all know that franchising is hard, and it's important to do your due diligence and so on. But still, you don't know what you don't know. Your community may not have enough people that fit the target demographic to support whatever franchise you're interested in. Or maybe there are too many restaurants or automobile service garages or whatever you're thinking of buying.

3. Make Sure You Have Plenty Of Capital

You'll need enough money for startup costs, and you'll need to nail down a budget that will keep you in business for six months or longer. How much money should you expect to invest? That can run the gamut. Some franchises are pretty cheap, and you may only need several thousand dollars to get started. Others might require anywhere between $600,000 and $1 million depending on the market. Whatever you need, just make sure you have it.

4. Hire The Right Team

This is critical. You'll want an experienced and trustworthy manager, especially if you plan on being an absentee or semi-absentee owner. And you'll also need to arrange for your staff to receive training, both initial and ongoing.

5. Pay Attention To Your Customer Service And Reputation

You can't cut corners in any franchise or in any industry. Even getting the little things right, like finding a consistently friendly receptionist, is very important. Customer reviews on Yelp and other social media sites can make or break a business.

6. Be Prepared To Do A Lot Of Marketing And Advertising

You'll want to use your marketing budget to get the word out about your business in every way you can, from social media advertising to direct mailers and billboards. You may have the best-run franchise in the world, but if people don't know your business exists, and especially if you don't have a brand name that the world recognizes (such as McDonald's or Burger King), they won't pay you a visit.

7. Focus On Customer Retention

The follow-up is very important, especially if you don't have a franchise that is an international sensation. Emails, phone calls, offering more specials — it's all important. Set up a loyalty membership program, too. Ask for referrals to add to your database and offer your current customers a valuable gift for sharing that information. Especially with businesses that don't rely on foot traffic, such as a gas station or those on a busy street corner, it's generally always easier to keep customers and build through referrals versus relying solely on cold calling and other, less direct sales efforts.

And finally, just remember to be thorough and patient before launching. Franchise systems are complex systems and require plenty of time to explore to make an effective decision, so it's important to take your time with the due diligence process. The more time you invest, the more return you'll likely see on that investment.
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Read the article about intellectual property
Intellectual property
Domestic legislation enacted within countries ensures intellectual property protection for two reasons:firstly, to give statutory expression to the moral and economic rights of creators in their creations andto the rights of the public in accessing those creations; and secondly, to promote creativity and the dissemination and application of the results and to encourage fair trade, thereby contributing to social and economic development. The division of intellectual property into two distinct legal categories, namely industrial property and copyright, results in different rights, duties and obligations, giving rise to varying degrees of protection and enforcement.

Industrial property, in broad terms, protects inventions and includes patents to protect inventions and industrial designs. In addition, it covers trademarks, service marks, layout designs of integrated circuits, commercial names and designations, as well as geographical indications and protection against unfair competition.

Copyright, also known as authors' rights in most European languages, relates to artistic creations, such as books, music, paintings and sculptures, and films and technology-based works, such as computer programs and electronic databases. While the expression copyright refers to the main act, that act is the making of copies of the work, whereas the expression authors' rights relates to the creator of the artistic work, namely its author. The author has certain specific rights in his creation which only he can exercise, such as the right to prohibit or authorize its reproduction, distribution, performance, communication to the public, translation or adaptation, and these are recognized in most laws. Other rights, such as the right to make copies, can be exercised by other persons where permission or a licence has been obtained from the author. A created work is regarded as protected as soon as it comes into existence. Copyright ensures the protection of the authors' rights and provides remedies for the author in the event of any infringement. Essentially, copyright protects the form of expression of ideas, whereas in the context of industrial property, inventions can be considered as new solutions to technical problems, and these solutions are ideas and are protected as such. In fact, protection of inventions under patent law does not require the invention to be actually physically in existence. The difference between inventions and literary and artistic works gives rise to different degrees of legal protection. As protection for inventions gives a monopoly over the right to exploit an idea, the duration of such protection is usually about 20 years, which is quite short. On the other hand, the protection of literary and artistic works prevents unauthorized use of the expression of the ideas, so the duration of the protection can be much longer. Furthermore, the public must be made aware of the fact that the invention is protected, and this is done publicly through disclosure in an official register, whereas a created work is considered protected as soon as it exists, and a public register of copyrights is not required.

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