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-Я хорошо осведомлён о затратах, но как насчёт издержек, если мы не будем конкурировать на этом рынке. Цена потерянного сбыта слишком высока. Мы не единственная компания на этом рынке. У нас довольно сильные конкуренты.

-Believe me, Thomas, I know the European market. And I’m against your suggestion. It isn’t feasible.

-Хорошо, позвольте мне сказать следующее. Мы подсчитали, что наши продажи удвоятся, если мы будем торговать по всей Европе. Мы не можем игнорировать такую возможность … как впрочем, и вы тоже. Я прошу вас изменить вашу политику в континентальной Европе. Если вы не сделаете этого, мы расторгнем наше дистрибьюторское соглашение с вами.

-But our agreement with you runs for another two years. And you know very well that cancellation is not the solution.

-Но, тем не менее, я думаю, мы должны урегулировать разногласия как можно скорее. Я предлагаю вам обдумать всё и встретиться на следующей неделе, чтобы принять определённое решение.

ROLE PLAY

Invent a company and make a presentation of it in class.

COMPANY PROFILE

1.What does your company do? _____________________________________________

2.What is it called? _______________________________________________________

3.What kind of public image do you have? ____________________________________

4.How many people do you employ? _________________________________________

5.Where are you headquarters? _____________________________________________

6.Do you have offices in other countries? If so, where? __________________________

7.What is your turnover, market share and net profits? Who is your main competitor?

_____________________________________________________________________

8.Are you growing, shrinking or holding steady? _______________________________

9.What are your most promising products and/or markets?________________________

10.What problems are you having and how are you dealing with them?_______________

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BODY CARE

Read the text.

WHAT IS FRANCHISING?

Franchising is a business system in which a company (franchiser or franchisor) sells the right to operate a business using the franchiser’s established system or format. A franchise agreement involves the license of trademark and know-how. All franchises trade under the same name and appear to be branches of one company, not independent companies. There are three different kinds of franchise arrangements.

Production franchises grant the right to manufacture and sell trademarked products. Service franchises give franchisees (who obtain license) the right or use the

franchiser’s trademark and know-how to provide services.

Finally, there are distribution franchises, where a franchisee sells products from premises using the franchisor’s name.

Franchising is an effective way to grow for a small business because it solves the two greatest challenges of expansion: finding the money and the people.

As part of the contract the franchisee pays an initial sum of money – a franchise fee, a management services fee and a monthly fee. He may also have to pay an advertising fee to contribute to the franchiser’s advertising and marketing costs.

Regardless of the type of establishment, the franchisor, or parent company, offers several initial advantages to the person who has limited capital to invest.

First, because of the established trademark and proven success of the existing enterprise, the franchisee can more easily obtain the bank loans needed to start the business.

Second, besides the buildings, equipment and trademark, the franchisor provides management training for the new franchisee.

In sum, the parent company provides – in return for the initial capital investment – a complete package of all that is needed to start the enterprise.

The main advantages for the franchisee are twofold: 1) he or she must pay a continuing royalty, or return from the profits to the parent company, and 2) the initial contract agreement usually prohibits or greatly restricts the owner’s freedom to innovate – that is, to depart from or add to the company’s established products and producers.

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Though franchising means low financial returns for the franchisor, it ensures lower risks and offers the opportunity to enter new markets without long-term investments.

Franchising is a cheap way to expand and an excellent way of keeping overheads to a minimum. This system passes the costs of expansion and overheads, like rent and staff salaries, on to the franchisee.

The franchisor doesn’t have to deal with problems of recruiting personnel. Yet he can get the advantage of local managers who know the market with its customs and preferences.

For the franchisee, the franchise offers an opportunity to start a business without the concept, image and products already developed. The franchisee gets the advantage of the franchiser’s brand name, reputation, experience, and advertising and promotion campaigns.

The franchisor supplies an operating manual, showing how the business should be set up and run. He will also supply consulting and legal services, hiring and training management personnel. There may be refresher courses to retrain them. The franchisor will normally supply the equipment and a stock of product. If things go wrong and profits are low, a franchisee can get help from the franchisor’s trouble-shooter.

The franchisee has various commitments under the terms of the contract. He can’t sell the franchise without the franchisor’s agreement. He is obliged to show the franchisor all the documents and provide the reports on the level of sales. He may have to buy supplies from one source. The franchisor insists on a strong corporate image.

There are three different strategies for franchise agreements. Firstly, the franchisor may choose to contract with individual franchisees for individual locations.

Secondly, the franchisor may use area development agreements. They allow one franchisee to exploit a particular geographic area, operating many franchise outlets and develop a particular market fully.

The third kind of franchise agreement often used internationally is the master franchise agreement. It gives a franchisee the right to develop the market in a particular territory and to subfranchise.

The franchise is a business relationship, based on contract, but relying on flexibility, faith and mutual efforts towards success.

Notes

to franchise – заключать договор на условиях аренды на условиях франшизы franchisor – франчайзер, франшизодатель

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Translate the sentences from Russian into English.

1.При заключении контракта на основе франчайзинга обе стороны принимают на себя определённые обязательства.

2.Франшизодатель обычно берёт на себя обеспечение основных компонентов бизнеса. Прежде всего, это утвердивший себя на рынке продукт или услуга и широко известная торговая марка.

3.Как привило, франшизодатель обеспечивает необходимое оборудование, сырьё и рекомендации о самом эффективном способе ведения данного бизнеса.

4.Франшизополучатель берёт на себя определённые обязательства. Он инвестирует капитал, покупая лицензию на право вести дело под определённой маркой на определённой территории. Кроме того, он обязуется выплачивать отчисления с суммы продаж и отчитывается перед франшизодателем по результатам коммерческой деятельности.

5.Контракты франчайзинга могут включать самые разнообразные условия. Некоторые из них могут быть не очень выгодны для какой-либо стороны, но каждый участник договора решает для себя, чего больше в этом контракте для его бизнеса – преимуществ или недостатков.

6.Тот факт, что франчайзинг так стремительно распространяется во всём мире, свидетельствует о том, что принципы подобного сотрудничества взаимовыгодны для всех его участников.

File 1

Glossary

Make sure that you know these words. Find Russian equivalents to them.

toiletry items (toiletries) – items and substances that you use in washing yourself and preventing the body from smelling unpleasant

outlet – a shop that is one of many owned by a particular company and that sells the goods which the company has produced

franchise – a right to sell a company's products in a particular area using the company's name