Businesses and Franchising
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Transcript of Businesses and Franchising
Business Presentation
A sole trader is an individual who is self employed.
They alone are the sole owners of a business and there is no one who can control them.
However, sole traders can employ other people to work for them.
WHO IS A SOLE TRADER? Examples of sole
traders include: Newsagents Hairdressers Plumbers Decorators/ Painters
A private limited company is, in most cases, a small business.
Private limited companies have shareholders, however, their shares are not traded on the public stock market.
WHAT IS A PRIVATE LIMITED COMPANY?
In a private limited company, there is often a fixed number of shareholders that they company can have.
Overall, these types of companies are quite restricted in terms of who owns them and what their shareholders can do.
An example is Warburton's.
Public limited companies are often well known businesses. They are much larger than private limited companies.
Unlike the private limited company, public limited companies have shares on the stock exchange.
WHAT IS A PUBLIC LIMITED COMPANY?
Examples of Public Limited Companies include:
Microsoft McDonalds NatWest
What is a Franchise ?
A franchise occurs when an entrepreneur
decides to buy into an existing business and
use the business’ idea instead of trying to
start independently.
This is a group of people who work with each other to meet the general needs and goals of its members.
In a co-operative the ownership is shared furthermore, choices are made democratically (through voting).
The directors who are chosen will hire others to take control of daily matters in a way that meets the interests of the members.
CO-OPERATIVE
Task 2Further information on Franchises, Franchisees and Franchisors.
What is a Franchise?A franchise occurs when an entrepreneur decides to buy into an existing business and use the business’ idea instead of trying to start independently.
Examples
What is a Franchisee?This is the person or the group of people who pay for the right to trade under the franchisors terms and conditions.
Strengths You will be setting up a business from one which already provides a well-known brand and whose product or service has been approved of.
You shall be given a lot of help and support when starting up instead of having to organise everything for yourself.
Your chances of success are drastically raised as people will already be familiar with what you sell and how your business operates.
Weaknesses
You cannot have an input of your ideas or creativity in the business; you must listen to what is instructed by the franchisor
You may have to pay on-going fees to the franchisor.
Any mistakes you make will immediately damage the reputation of the franchise so often you will be under pressure of standards that you have to live up to
What is a Franchisor?This is the person or company that sells others the right to use their business idea in a particular location.
What are the strengths and weaknesses of being a Franchisor?
Strengths
It allows the company to expand their business idea
It creates another source of income
The franchisee is motivated since they have
put money into the business so will most likely
perform well
Weaknesses
Their trade name could be ruined if the franchisee
performs badly
The franchisor has to give away information that is
confidential which puts their business at risk
The franchisor could put pressure on the franchisee causing them not to give
optimal performance
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