Question

Midwest Auto Experts, Inc. sells franchises to prospective businesspersons who want to use the Midwest Auto Experts name and offer its products. In a franchise arrangement, Midwest Auto Experts would be the __________, and the buyer of the franchise is the __________.

Answer 1

Midwest Auto Experts would be the: franchisor;

The buyer of the franchise is the: franchisee.

Step-by-step explanation:

Franchising is a form of business arrangement. The Midwest Auto Experts, Inc. is the franchisor because it is the one that provides the busyness system (name, logos, trademarks etc.), while the buyer of the franchise – franchisee – will invest and establish a franchised locations using the franchisor busyness systems. It’s a much easier form of opening a business since all the know-how is already available and the brand-name recognition makes having customers easier.

Example of solid franchises: Dunkin' Donuts'; McDonald's and 7-Eleven.