Question

Franchising is a rapidly growing form of licensing in which a franchiser provides a standard package of products, systems, and management services, and a franchisee provides market knowledge, capital, and personal involvement in management. What is the main role of the franchiser in a franchising agreement?

1) Providing market knowledge, capital, and personal involvement in management
2) Providing a standard package of products, systems, and management services
3) Providing market knowledge and capital
4) Providing personal involvement in management

Answer 1

The correct option is 2). The franchiser's main role is to provide a standard package of products, systems, and management services which allows franchisees to replicate the established business model.

Step-by-step explanation:

The main role of the franchiser in a franchising agreement is to provide a standard package of products, systems, and management services. Franchisers are responsible for giving franchisees the necessary tools and systems to reproduce the brand's successful business model within various markets. This package typically includes trademarks, established brand recognition, proprietary knowledge, and operational practices, which are critical for ensuring consistency and maintaining the integrity of the brand across different locations.