Paper 1 · Specimen 2026 · Forms of Enterprise
A franchisee pays the franchisor an initial fee and a regular royalty in return for
Athe right to trade under its name
Ba seat on the franchisor's board
Ca share of the franchisor's profits
Downership of the franchisor's premises
Explanation
A franchise sells the use of a proven business format. The franchisee puts up its own capital, trades under the franchisor's name and follows its product range, layout and quality standards, and pays a fee and a royalty for that right. It never buys the franchisor's assets and it gains no say in running the franchisor.
Derived from ZIMSEC Business Enterprise Skills Paper 1, Specimen, Q1