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32 Cards in this Set
- Front
- Back
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Advantages to the Franchisee |
less risk, Back-up support given, Setup costs are predictable, National maketing may be arganised |
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Disadvantages to the Franchisee |
Profit shared with franchisor, strict contra have to be signed, lack of independare can be expensive to start.. |
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Advantages to the franchisor |
Fast method of growth, cheap method of growth, take some risks, more motivated than employees. |
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Disadvantages to the franchisor |
Potential Profit shared with franchisee, Poor Franchisees ruin reputation, as franchiser may get merchandise elsewhere, cost of support of franchisees to high, |
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What is a franchisor, franchisee, franchise |
A franchiser sells franchise A franchisee buys franchise A franchise is the right use an existing brand name |
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What are the characteristics entrepreneurs need |
•Innovators • Organisers • Decision Masers. • Risk Takers. |
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What is a franchise |
An arrangement allowing another business to trade in same style as existing business |
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Advantages of sole traders |
* owners Keeps all profit. * independent/control of business. * Simple to set up , no legal requirements * flexibility - adopt to change fast * offers personal service as it’s small * May qualify for government help |
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Examples of real businesses that are sole traders |
primary sector - farmers, fisherman. secondary sector - small manufacturers or builders. most business would be tertiary sector - cleaners, hairdresser, tailors. |
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disadvantages of sole traders |
- unlimited liability - struggle to raise finance - independence to big of responsibility - long hours / hard work - business dies with owner |
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Examples of real businesses that are partnerships |
- architects - lawyers - accountants - vets - financial advisors - physicians-Drs |
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disadvantages of partnership |
- unlimited liability - decisions take longer - profits have to be shared - conflicts can occur and lead to fall out - partners decisions are legally binding |
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Evaluate the suitability of being a partnership. |
it needs more capital and multiple things need to be done simultaneously |
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Why a sole trader would operate as a small business |
setting up as a sole trader is common for people starting small businesses because it is by far the simplest and cheapest business structure to establish |
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advantages of a partnership |
- finance easier to raise than sole trader - shared workload - share any debts to pay - more capital raised since more owners - specialisation - financial info not published - share ideas |
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What is the definition of a partnership |
businesses owned between 2 to 20 people |
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What is the definition of a deed of partnership |
binding legal document that states the formal right of partners |
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What is the definition of limited liability |
shareholders legally responsible for the debts of a company according to owners |
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What is the definition of a limited partnership |
type of partnership, limits personal liability of partners |
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What is the definition of audits |
examination of a companies financial records, in order to check if correct |
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advantages of social enterprise |
- provides local employment - positive change to people / community - social benefits - people have more ownership - give flexibility to trade commercially |
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disadvantages of social enterprise |
- compete in commercial markets - face some challenges common to all businesses who make more profit - may not have skills to continue |
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What is the definition of social enterprise? |
business which is improves human or environment wellbeing |
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What is the definition of cooperative |
business owned by "members only" |
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What is the definition of a consumer cooperative? |
cooperative owned by customers |
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What is the definition of a retail cooperative? |
retail members who often work together to assert their power |
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What is the definition of a worker cooperative? |
cooperative owned by employees |
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What is the definition of unincorporated |
not formed into legal cooperations |
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What is the definition of sole trade / sole proprietor |
a business owned by a 1 individual |
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What is the definition of unlimited liability? |
owner of business is personally liable for business debts |
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What is the definition of a lack of continuity? |
supply chain failure or losing key employee |
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What is the definition of an entrepreneur |
someone who starts a business and is willing to risk loss in order to make money |
