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
Practise new vocabulary on Quizlet
Read the following article and practise new words and expressions
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
Answer the questions to the text 1
You can compare your answers with answer key below
Listen to a telephone conversation between a lawyer, Mr Howard, and a new client, Professor Daykin.
Answer the questions to the audio 1
You can compare your answers with answer key below
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.
Answer the questions to the text 2
You can compare your answers with answer key below
Watch the video and answer the questions
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.

Answer the questions to the text
You can compare your answers with answer key below
Your homework is to write the summary of this topic, minimum 15 sentences, using new words and expressions
Write your own beautiful success story!
Translate the following sentences into English
the first set is mandatory
Compare your answers to the answer key
Answers to the text 1 questions
  1. Allows others to use their brand name
  2. Where a business sells the rights to their brand
  3. royalty fee
  4. none of these
  5. FALSE
  6. TRUE
  7. FALSE
Audio 1 answer key
  1. Socially, through the tennis club (but she doesn't know him very well, as they are not on first-name terms).
  2. She doesn't want to make her complaint too formal, as she's unsure about what can be done.
  3. They have been put together for the students on a course to use. They contain articles, notes or syllabi, sample test questions and excerpts.
  4. For the material to be reproduced only in course packs.
  5. She's angry with the copy shop for making more copies than necessary and selling them on for profit.
  6. He suggests Professor Daykin write out the details so that he can look at the matter further.
Audio 1 tapescript
Mr Howard: Good morning, Professor Daykin. It's good to talk to you again. What can I do for you?

Daykin: It's good of you to speak to me — I know you're a very busy man. This is just so difficult. I really don't know what to do. I've been working at Sarvat for the past twenty years and nothing like this has ever happened to me before. I mean, I just can't believe it. A place with such a high reputation — to let this happen — and now I have to contact you. I've only ever had to contact a lawyer once before in my life, and that was when I was buying my house. Ages ago. We've known each other from the tennis club for years, but I never thoughtI'd see the day when Id have to contact you in a professional capacity. I've got no alternative. I've been thinking about this all week, and it's affecting me badly.

MH: You're clearly very upset, Professor. Would you like to make an appointment and come in and have a chat when you're feeling a bit better?

PD: No, no, no, I don't want to make it that formal yet, if that's all right. I really need to just talk it through at this stage. I mean, maybe I mean, it's how nothing, maybe nothing can be done. I feel so angry. I mean, how could they do this to me?

MH: You know, sometimes it's good to write it all down and maybe send it in to me, so that I can have a better look at what you've written and get back to you, rather than doing this on the phone.

PD: No, I'll try and give you a quick outline, and you can let me know what you think. Is that all right?

MH: Fine. You go ahead, andI'll make some notes.

PD: Thank you so much.It's like this ... you see, I have an arrangement with Sarvat University Press. In fact, most of the professors here have this arrangement. We select the contents of course packs. They usually consist of journal articles, newspaper articles, course notes or syllabi, sample test questions, excerpts from books ... that sort of thing. We deliver the contents to the copy shop with an estimate of the number of students on the course. The materials are assigned to the students, so the copy shop knows who is eligible to buy the packs if they want to. I must emphasize that these packs are designed solely for the students on a particular course. Any course packs that are not bought by the students are usually destroyed by the copy shop. However, what happened was that the copy shop made multiple copies of the materials which we provided and then sold them on to other students for a profit.

MH: Who looks after copyright payments and permission for the professors?

PD: It's Sarvat University Press. They have a department that receives and processes requests for permission to use any copyrighted works. They usually charge a fee and generally share these fees with the authors.

MH: So, who is affected by this?

PD: Well, a lot of the material in question belongs to some of my very close friends in the academic world, who I have the greatest respect for. Their trust in me has been badly affected by all of this. The course packs were prepared for selling commercially in a limited capacity. The copyrighted works are valuable original works. I mean, surely copyright protection is supposed to protect authors, and only those who pay can copy excerpts of copyrighted works for a variety of purposes?

MH: I feel at this stage that you should write out in detail what you've told me and send it to me so that I can look into the matter further and get back to you. I have the gist of it, but I would need to look at it much more carefully. I can certainly understand how you feel. The quicker we deal with it the better.

PD: That's excellent. I'll get down to it right now, and maybe you could give me a call when you've had a chance to look at it.

MH: That sounds perfect. Now, if you'll excuse me, we'll have to leave it at that for now. I'll be in touch as soon as possible, Professor. Goodbye for now.

PD: Thank you very much for your time, Mr Howard.I feel better already. Goodbye.
Answers to the text 2
  1. Buying a franchise means you'll be successful. FALSE
  2. You need to explore the area where you want to run the franchise. TRUE
  3. You don't need much money to start a franchise business. FALSE
  4. You don't need to arrange for your staff to receive training. FALSE
  5. Customer reviews on social media sites can make or break a business. TRUE
  6. You need to advertise your franchise business everywhere and a lot. TRUE
  7. Franchise systems require plenty of time to explore to make an effective decision. TRUE
Answers to the text 3
  1. a) To give statutory expression to the moral and economic rights of creators in their creations and to give statutory expression to the rights of the public in accessing those creations b)To promote creativity and the dissemination and application of the results of such creativity and to encourage fair trade
  2. The two legal categories mentioned are industrial property and copyright.
  3. They give rise to varying degrees of protection and enforcement.
  4. Authors' rights relate to the creator of the work. Copyright refers to the act of making copies of the work.
  5. No, the invention does not have to be physically in existence.
  6. Protection for an invention gives a monopoly right to exploit an idea, so the duration is about 20 years, because it is only the exploitation of the idea that is protected. Copyright protection, on the other hand, prevents unauthorised use of the expression of the ideas, so the duration of protection can be much longer.
  7. Through registration of the invention.
  8. Because a created work is considered protected as soon as it exists.
The first set
  1. If you're interested in becoming an affiliate or Harper's FRANCHISE HOLDER, please contact our Sales Director on the number below.
  2. The situation was resolved in August 2007, with the termination of the FRANCHISE AGREEMENT and the return of Edinburgh to the direct control of the SRU.
  3. I was spending my first big ROYALTY cheque on a holiday in Moscow and St Petersburg.
  4. You see, this... is a blossoming FRANCHISE with endless possibilities, thanks to you.
  5. Plus, they've agreed to waive their FRANCHISE FEE.
  6. COPYRIGHT attaches only to original works.
  7. He published about 240 research papers, which includes 35 INVENTIONS.
  8. ENTREPRENEUR, investing in our start-up company.
  9. The owner of the MASTER FRANCHISE for 7-Eleven in Scandinavia is Reitan Servicehandel, an arm of the Norwegian retail group, Reitan Group.
  10. Total GROSS SALES of this period was $88 million.
The second set
  1. They also asked him to RESIGN THE FRANCHISE.
  2. And if that location's successful, FRANCHISING would be the next step.
  3. Copyright 2010, Favori is a registered TRADEMARK.
  4. Despite uniformity in appearance, a FRANCHISEE is independent from its franchisor.
  5. Its MASTER FRANCHISEE, PT Fastfood Indonesia, was publicly listed on the Indonesian Stock Exchange in 1993.
  6. He also indicated that several law schools provided courses on INTELLECTUAL PROPERTY issues.
  7. It should be possible to secure all types of OBLIGATIONS.
  8. Finally, counter-terrorism personnel engaged in continuous TRAINING.
  9. LICENSING is required for all polluting activities.
  10. That AGREEMENT cannot be withdrawn or appealed.
The third set
  1. The franchisee sells goods or services that meet the FRANCHISOR'S quality standards and operates under the FRANCHISOR'S trademarks.
  2. France recently strengthened its financial LEGISLATION against money-laundering.
  3. This Board is in a position to fight against violations of INDUSTRIAL PROPERTY by imposing administrative fines.
  4. Your DUTIES do not require you to come.
  5. We filed our PATENT before they did.
  6. The RIGHTS Hogg identifies include language RIGHTS.
  7. We were just getting to DISSEMINATION.
  8. My AGENT thought it would be perfect fodder for my blog.
  9. These are provided with nationally recognized CERTIFICATION.
  10. LEASING office, pick up line 3, please.
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