Admi 202 Study Guide Final

Some of the advantages with owning a franchise are the comfort of not having to be totally in control of the business. A franchise is usually ran by a someone who is already extremely wealthy,An advantage to a franchise is seeking success at a lower failure rate. A disadvantage is being limited to your earnings, meanwhile a business which strictly belongs to one person may see a 300% increase in profits. Mcdonald's first difference that helps towards tremendous success was being able to franchise correctly. Owning a company millions of people where interested in providing money for. Krocs initial fee to opening up a mcdonald's was a 950 dollar fee, he was more interested in saleing his product. Krocs took a different approach when he started franchising his business he stopped pursing wealthy men who seen his company as an investment and pursued families whos lifes he could change and promising a better future.

Limited liability: There is low or reduced financial risk due to the fact that the entity is separate from its owners. The liability to creditors and other obligors is limited only to the resources of the entity.

Limited liability company (LLC): A partnership on which all partners are not responsible for the debts and other

The marketing and advertising advertisements created by the franchisor leave franchisee with more time to focus on the daily operating of business. This is a win-win for both parties. It helps increase sales by means of franchise, which, on the other hand, allows the parent company to collect more fees. (Bernd H. 2008)

A corporation can be defined as firstly having limited liability, where its owners, the shareholders, are not required to use their personal assets to pay the debts of a failed company; thus the owners and the corporation are separate legal entities. Secondly a corporation has delegated management where the decisions of how the company is run, are left to the managers whom are separate from the owners. Finally the owners of the corporation can easily transfer their share of ownership through the exchanges in the financial markets.

There are many advantages of investing money in a franchise such as; a franchise includes an already established business with a known brand name by the people. Franchise comes up with an established business system which includes products and services. The franchisor offers the franchisee the training of employees, financial planning of the business and also approved suppliers. The disadvantages of franchising are there too, a lot of investment is required in order to buy the rights of the franchisor as well as on-going royalty costs is costly. Other disadvantages include, less creativity since the franchisee lacks the control in the territory because the franchisee has to work according the business system of the franchisor. The business of franchising is a way to grow the operations of a business; it allows the franchisor to sell its products a bigger market. The beauty of franchising is that it allows both the parties, the franchisor and the franchisee to have a win-win situation, franchisors who want to grow their business with a less amount of investment and franchisee who wants to do business without starting from the

It’s first important to understand some of the responsibilities of a franchise owner. In general, a franchise owner is responsible for a specific location, or branch, of

Liability: There is limited liability for the stockholders, meaning they are only liable for their investment they have put forth into the corporation. This is similar to a limited partner since limited partners are only liable for their investment that they have in a limited partnership.

Society needs successful businesses, but today business is taking over society. The unfettered rise of corporate power that presents the biggest threat to free markets, and to the ability of free markets to promote individual freedom, equality before the law and equitable prosperity. Limited liability means power without responsibility and it is spreading fast. Originally a privilege only of publicly-quoted corporations, it has recently been extended to partnerships

By joining a national network of franchisees, franchisees are becoming part of a large group of buyers with the ability to negotiate preferential prices from suppliers and generate other economies of scale, such as in delivery charges. Franchisees may even be able to secure exclusive access to a product or service.

Which is great when you are just starting out and want to ensure that your business - your franchise - is located where the largest amount of your potential customers are (or, where they are most likely to find your business).

It will be still be your hard work and skills that make the business work in your area. As a franchisee you will have access to market knowledge, established name awareness in the business sector that you will be operating in, training and marketing help. You will often take part in and contribute to national advertising campaigns which would otherwise be outside your reach.

A legal entity that is separate from its owners and managers.Advantages are (1) unlimited life, (2) easily transferred ownership and(3) limitedliability.Disadvantages are (1)earnings may be subjectto double (both corporate and personal) taxation and (2) setting up and running a corporation is

Franchising has been an influential economic engine and is vital in the expansion and growth of the business for nearly half a century (Ekelund, 2014). The inherent benefits of franchising as a business model are the key influencers of the decision of entrepreneurs opting for franchising instead of establishing a new business (Oni, Sekwele, Matiza & Pelser 2014). Beredo and Mendoza (2013) said that in order to survive in this kind of business, capital, skill, positive attitude, good location, good management and best service should be considered. Furthermore, that every franchise system revolves around its franchisees’ quality and the personal decisions that the management make with respect to their work. Understanding the cost and returns are essentials which franchise companies must work in their programs to the market and be straightforward in the assessments, with these, returns can be generated over the period (Kong & Zwisler, 2007).

Nowadays, franchising is one of the easiest ways to start a business. Franchising is defined as a long-term, continuing business relationship wherein for consideration, the franchisor grants to the franchise a licensed right, subject to agreed requirements and restrictions, to condusct business utilising the trade and/or service marks of the franchisor and also provides to the franchisee advice and assistance in organising, merchandising, and managing the business conducted to the licensee 1. The company granting these rights in deemed the franchisor, the receiver of these rights the franchisee, and the right is defined as the franchise. The franchiser owns a trademark or brand, which he (or she) agrees to allow the franchisee to use for a fee (often an original purchase price plus a percentage of sales). The franchiser provides the franchisee with assistance (financial, choice of site, and so on) in setting up their operation, and then maintains continuing control over various aspects of the franchisee 's business; for example, via the supply of products, discussion of their marketing plans and/or centralized staff training 2.