Text 6: franchising

Text 5: HOW TO STUDY LABELS

Labels are placed on foods, clothing, and other articles in order to protect you, the consumer. Governments require that certain kinds of information be included on these labels to help consumers judge the quality of the products.

There are a number of federal laws on labeling. For example, the Food, Drug, and Cosmetic Act provides that all packages of food, as well as drugs and some cosmetics, must state all the things these products contain. The Wool Products Act requires that the label on clothing state how much wool it contains.

Manufacturers must also state the name of the fabric in every garment, whether wool, cotton, or artificial fiber. They must also tell how to clean it. The Fur Products Labeling Act orders the maker of a fur garment to state from what animal the fur was taken and from what country the fur came.

Some of state and local governments require that every package of meat carry information about its contents. If it is hamburger, for example, the package must name the part of the animal from which the ground meat comes. It also must state whether anything besides meat has been added.

Many products, such as bread, milk, and cheese, must be stamped with a date. This is the date by which the product must be sold. Dating a product ensures that it will be fresh when purchased.

Some laws require unit pricing. That is, the price tag must show how much money is being asked a unit - for an ounce or a gram, for example. A 10-ounce (283-gram) can of peaches would be a better buy than a can at the same price with only 8 ounces (227 grams). Also, a can with fewer peaches and more syrup would not be as good a buy as one with less syrup and more peaches, even if the weight marked on the can was the same.

Unless people are able to read labels intelligently, the labels will be of no help to them. Beware of a term such as "highest quality." These words sound good. Yet they often have no real meaning. A label stating that a piece of clothing is "pre-shrunk" means little. The label does not tell you how much the piece of clothing is likely to shrink when it is washed. If the label says "Sanforized," however, you know the clothing will not shrink more than 1 percent. The word "Sanforized" is a standardized term that has this meaning in the clothing industry.

From the Civics

Franchising means granting a formal right to the manufacturer, wholesaler or retailer to produce or to sell the company's goods or services in a special area for a specified period of time. This way of doing business is widely used in the market economy. 40% of all sales in the USA go through franchising which makes $1 billion as annual volume of sales. These figures are presented by International Franchising Association. Franchising in Great Britain is supported by government. The banks give loans to businessmen, and the government guarantees 80% of the loan.

Purchase of a franchise is a simple way of starting business. Reliable scheme of doing business, a promoted brand, product of high quality - all these things increase chances of a beginning businessman for success. For a stable company it is a good way of expanding markets. These are great advantages of franchising.

According to Russian Franchising Association, the number of franchises in Russia does not exceed two dozen. In other words, it is not developed in our country.

History of franchising in Russia dates back to 1993, when Baskin Robbins sold the first franchise in our country. Later, some Russian franchises were sold, among them a chain of shoe stores "Ekonika", fast food "Rostics", "Teremok", "Russkiye bliny", "Niam-Niam", filling stations LUKoil, TNK. But still we can't say that franchising is highly developed in Russia. Legal, administrative and financial problems are in the way of its development. Our laws don't operate the notion "franchising". One of the main things in the process of selling franchise is transfer of a brand name. According to Russian laws, brand name can't be transferred. Another serious problem is responsibility of subsidiary company. For example, if franchisee in Siberia violates standards of franchisor in Moscow, the consumer has a right to make a claim against low quality of goods or services. Open joint-stock company LUKoil which sells franchises for setting up filling stations, has special departments in the areas where its franchises operate. In order to develop this kind of business laws on franchising should be passed.

From the Internet

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