Holiday Inns and McDonald’s. both saw unmatched growth in the 1960s. Their growth opened a

Holiday Inns and McDonald’s. both saw unmatched growth in the 1960s. Their growth opened another direct business operation—franchising.
These operations have the same general pattern. The franchisor, the parent pany, first establishes a successful retail business. As it expands, it sees a profit potential in offering others the right to open similar business under its name. The parent pany’s methods and means of identification with consumers are included in this right. The parent pany supplies skill, and may build and rent stores to franchisees. For these advantages the franchisee pays the franchisor a considerable fee. However, some of the advantages and disadvantages are different.
By extending a “proven” marketing method, a parent can profit in several ways. First, the franchisee’s purchase price gives the parent an immediate return on the plan. Then the sale of supplies to the franchisee provides a continuing source of profits. As new businesses are added and the pany’s reputation spreads, the values of the franchise increases and sales of franchises bee easier. The snowballing effect can be dramatic. Such growth, too, bring into play the economies of scale. Regional or national advertising that might be financially impossible for a franchisor with 20 franchises could be profitable for one with 40.
The parent, then, finds immediate gains from the opportunity to expand markets on the basis of reputation alone, without having to put up capital or take the risk of owning retail stores. Added to this advantage is a less obvious but material one, Skilled, responsible retail managers are rare. People who invest their capital in franchises, though, probably e closer to the ideal than do paid managers. In fact, the franchisee is an independent store operator working for the franchisor, but without an independent’s freedom to drop supplies at will. Of course the factory’s costs of selling supplies are less. But also certainly the franchisee buying goods that have had broad consumer acceptance will not casually change supplies, even when the contract permits. If the hamburger is not what the customer expected, they may not return. Having paid for the goodwill, the franchisee won’t thoughtlessly destroy it.
【小题1】 Franchising refers to a business operation in which a successful parent pany     .A．sells name-brand goods to a private investorB．rents proven ideas and techniques for investmentC．sells the right, the guidance to a business under its nameD．takes no advertising responsibility for individual investors【小题2】. The advantages of franchising to the parent pany are all the following EXCEPT    .A．an immediate investment returnB．the profit from the sale of suppliesC．the ownership of additional retail storesD．the possibility of profitable advertising【小题3】 The passage mainly tells the reader     .A．the advantages and disadvantages of franchisingB．the benefits of franchising to the franchisorC．the unmatched economic growth in the 1960’sD．some regional and national business operation【小题4】. What will the author probably discuss after the last paragraph?A．More advantages of franchising.B．Negative aspects related to franchising.C．The standard of consumer acceptance.D．Risks of investment besides franchisingC