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How does franchising work? Explain the difference between a franchise and a sole proprietorship. Must be at least 1 paragraph.

User NullUser
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Final answer:

A franchise is a business model where a person purchases the rights to operate a business based on a proven model established by the franchisor. In a sole proprietorship, a single individual owns and operates the business.

Step-by-step explanation:

A franchise is a business model where an individual (franchisee) purchases the rights to operate a business based on a proven model established by the franchisor. The franchisor provides support and training to the franchisee and the franchisee pays a franchise fee and royalty fees to the franchisor in return. This model allows the franchisee to benefit from an established brand, marketing support, and operational guidance from the franchisor.

A sole proprietorship, on the other hand, is a type of business ownership where a single individual owns and operates the business. The owner has full control over the business and is personally liable for all the debts and obligations. Unlike a franchise, a sole proprietorship does not have the benefits of a proven business model or support from a franchisor.

User Serge Seredenko
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