Business Ownership

Business Ownership

1. Franchise

   • Firms successful business model and their name
   • Pay the firm to use their name and sell their stuff.
   • Examples
     • The twilight saga
     • The hunger games
     • Mcdonalds
   • Franchiser
     • Advantages
       • More money
       • Business grows faster
     • Disadvantages
       • Badly run
         • Bad reputation
   • Franchisee
     • Advantages
       • Support of the franchiser
         • Staff training
       • Good franchiser reputation means good buisness
       • Franchiser provides advertising, packaging and equipment
     • Disadvantages
       • Don't have any control
       • Expensive to buy into the company
       • Franchiser fails and so does franchisee

2. Sole trader

   • Owned by one person
   • Individual
   • Single
   • Advantages
     • Own boss
     • May not need to employ staff
     • Easy to set up, with few starting costs
   • Disadvantages
     • Difficult to take time off
     • Unlimited liability, sell possesions to get out of debt
     • No sharing risks, or anyone to help with decision making.

3. Partnership

   • 2 people
   • Dual
   • 3-1=2
   • Advantages
     • Time and cost commitments are shared
     • More money can be raised
     • Wider range of skills, talents and ideas
   • Disadvantages
     • Profits have to be shared
     • Harder to close down
     • Partners might argue

4. Limited company

   • Liability of members of the company is limited to what they have invested
   • Can't use personal belongings to pay off debt
   • Only the money put in by the buyers
   • Public
     • Advantages
       • Value of shares go up
       • Not personally responsible for debt
       • More access to finance
     • Disadvantages
       • Loss of individual control.
       • Value of shares go up
       • Threat of being taken over
   • Private
     • Advantages
       • Share of profits
       • Easier to raise funds
       • Shareholders aren't responsible for debt
     • Disadvantages
       • Complicated to set up
       • Control of the company is spread out
       • Employees might not be committed