Item A: FitFork is a new healthy takeaway. Its founders have £70,000 available. An established franchise requires an initial fee of £28,000 and 7% of monthly sales. It provides recipes, training, national promotion and an online-ordering system. Franchisees must use approved suppliers and cannot change the menu without permission.
State one service provided by the franchisor.
Calculate the franchise fee as a percentage of FitFork's available funds.
FitFork is considering two ownership approaches:
Option 1: Buy the established franchise
Option 2: Operate as an independent start-up and develop its own brand, training and ordering system
Justify which one of these two approaches FitFork should choose.
37 exam-style questions on Edexcel GCSE Business 1.4 Making the business effective, covering 1.4.1a Limited liability, 1.4.1b Types of business ownership for start-ups, 1.4.1c Franchising, 1.4.2a Factors influencing business location, 1.4.2b Impact of the internet on location, 1.4.3a What the marketing mix is, 1.4.3b Balancing the marketing mix, 1.4.3c Impact of technology on the marketing mix, 1.4.4a The role and importance of a business plan, and 1.4.4b The purpose of planning business activity. Each one has a worked solution and a mark scheme showing where the marks go.