This lesson is the culminating project in a business course. It will be used as the assessment for a unit on business franchise opportunities.
Students will identify and evaluate a franchise as a business opportunity.
franchise, entrepreneur, business, investment, evaluate, research
- Internet access (optional)
- Assignment sheet (text provided in Lesson Plan section below)
At the beginning of the semester we talked about different types of business franchises. As the course progressed, we talked about franchises two or three other times when it was appropriate to do so. We have also viewed a video about Ray Kroc, the man behind McDonald's. We will close out the semester with this individual project.
Before beginning the activity, ask students to brainstorm in small groups the steps that might be involved in deciding whether a particular franchise opportunity is a good one or not. How would they evaluate the franchise? Let students share their thoughts. Those thoughts might include the following general guidelines:
HOW TO EVALUATE A FRANCHISE
- Study the opportunity before committing.
- Study financial information.
- Talk to other franchisers.
- Work for someone who owns a franchise.
Then provide students with a Franchise Opportunity assignment sheet. The text of that sheet (below) includes all the information students need to investigate and report on a franchise opportunity of their choice. They will select a franchise they would like to investigate, do the research (to include writing to the franchisee for all the pertinent information), and use the questions on the worksheet to evaluate the opportunity. At the bottom of the assignment sheet, students are asked to conclude whether or not the franchise would be a good opportunity.
Following is a statement of the activitys guidelines:
1. You are an entrepreneur looking for a business to start up. Assume that you have financial backing and the educational and business experience needed for this venture.
2. Research and evaluate a franchise opportunity that is of interest to you.
3. Write a two-page paper incorporating the answers to the questions below.
4. This paper must be written using a word processor program and is due on [date goes here].
5. Please include a bibliography of the sources you used to compose the paper.
6. Bonus points will be awarded for an interview with a franchise owner.
Ten Questions to Ask Before Signing a Franchise Agreement
1. What does the initial franchise fee cover? Does it include a starting inventory of supplies and products?
2. How are the periodic royalties calculated and when are they paid?
3. Are all trademarks and names legally protected?
4. Who selects the location of your business?
5. Are you assigned an exclusive territory?
6. If the territory is not exclusive, does the franchise have the right of first refusal on additional franchises established in nearby locations?
7. Is the franchisee required to purchase equipment and supplies from the franchisor or other suppliers?
8. Under what conditions can the franchisor and/or the franchisee terminate the franchise agreement?
9. Can the franchise be assigned to heirs?
10. Who provides and pays for advertising and promotional items?
Now that you have researched this company, do you think that buying this franchise would be a viable option for you? Share your findings in a two-page report.
The following rubric can be used to evaluate students reports:
- Research (50 percent) -- Does the paper answer all questions on the assignment sheet?
- Writing (20 percent) -- Do the writing and bibliography meet quality standards?
- Initiative/Effort (30 percent) -- Did the student do just enough to get by? Make a little extra effort? Go the extra mile?
Amy Derr, East Lyme (Connecticut) High School
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