Research Question: Which form of business ownership is more likely to grow and succeed as a business?
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This essay will discuss various aspects of franchises and private limited companies. For example, how they are formed, their profit distribution, taxation etc. It will also highlight which form of business is more likely to succeed.
The Al Habtoor group is a private limited company and are a LLC. It operates in the secondary sector. Each member has limited liability and will only lose their investment in the business. This business can have a maximum of 50 shareholders and need the agreement of all shareholders to sell their shares.
Subway is a
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You also get access to market research along with advertising and merchandise assistance. Plus, you get associated with a well known brand and get access to operator manuals and stock control systems. The disadvantages are that the franchise owner does not have control over business decisions and must follow the operator manual, and you are not obliged to renew the franchise agreement at the end of the franchise term and a royalty fee needs to paid to the franchisor for doing business with them. You are allowed to work within your own territory and need to pay a startup fee and do not control the pricing or the business model.
Private Limited Company
The advantages in a ltd company are that you have limited liability and will only lose what you invested. You can raise the company’s capital since it can have up to 50 shareholders. However, growth might be limited to the small amount of shareholders and you need the agreement of other shareholders to sell your shares.
A nice advantage to owning a S corporation is that it is limited liability which means that the owner/owners of the company
First of all, franchising allows the company to achieve success in Turkey with minimal economic and political risks. Since opening of own outlet in Turkey requires an agreement with the government and careful research on local market conditions, it is to the advantage of M&S to have a local partner working under company’s brand name. And about 700 outlets in 34 countries is the best show of efficiency of franchising.
Below I have set out a table to show the Advantages and Disadvantages of a public limited company. ADVANTAGES DISADVANTAGES Shares offered for sale on the stock exchange, so that large amounts of capital can be generated. Shareholders protected by limited liabilit... ... middle of paper ... ...ibit the already efficient practices from continuing.
Task One E1 They type of businesses 1. Private and Public enterprise 2. Limited Liability 3. Franchising I will define each type of business with some advantages and disadvantages. For The Coca-Cola Company ... ...
7-Eleven focuses on teamwork and encourages all franchisees to train every employee to be a leader instead of a follower. As an employee in 7-Eleven, I have been always told to dream as if one day I would be franchisee of a 7-Eleven store. One other thing the corporate tells the owners to look at is hire someone who would become a franchisee one day. Managers are expected to give out extrinsic rewards, and be a charismatic leader.
There are two types of limited companies: Private and public. Shareholders own private limited companies. Members of the public cannot buy the shares and the shareholders cannot buy or sell their shares without agreement from the other shareholders. Family owned businesses or larger businesses such as Virgin would fit into this category. Public limited companies have shares on the stock market and can be bought and sold by any member of the public, this way the company can raise further capital and expand their resources. Tesco and British Telecom are such examples. Both these types of limited companies have limited liability, which means the owners of the business are only liable for the amount they invested in the business (unless the debt is so large that the business has to be sold to repay the debt).
Not having to answer to a corporate boss is the dream of many and the flexibility that owning a business franchise creates provides this option. Success is not reached by simply creating a business, however. The level of success is measured by the size and efficiency of the business. Business growth is the driving force of the economy. The additional jobs and revenues created when a business expands allow the economy to grow at exponential rates. One of the fastest and most popular ways to increase the size of a business is to turn it into a franchise, which can then be purchased by individuals. Franchising provides opportunities that are beneficial to both the parent company and the purchaser. The company that owns the business can expand without having to pay such a large initial cost to open a new store since the franchise purchaser pays a cost to open the business. As well, the company can regulate many of the business activities so that there is a sense of consistency throughout all of the locations. The purchaser is allowed to use the trademarks and goods of the franchise which already have a large market presence. As well, they are provided with training and work standards by the company to help their business run smoothly (Kalnins & Lafontaine, 2004, p.761). Looking at the business model of the world’s largest food retailer, McDonald’s, provides great insight into franchising and business growth in general as well a better understanding of a global business that utilizes the franchising technique.
The advantage of franchising is that he will grow a whole new customer base in those areas. It leads to increase in profits. He will also be able to find out what new programs he can develop to gain more customers through this new customer base.
Manufacturing Franchise: These types of franchises provide an organization with the right to manufacture a product and sell it to the public, using the franchisor’s name and trademark. This type of franchise if found most often in the food and beverage industry. Most bottlers of soft drinks receive a franchise from a company and must use its ingredients to produce, bottle, and distribute the soft drinks.
Making the decision to open your own business is a major life event. Starting a new venture can be exciting as well as rewarding. The first step to becoming a business owner is choosing the type of business you would like to run. This business can be something that you have wanted to start up yourself or you can go with an established franchise. Are you willing to share the profits in exchange for the relative safety of a franchise or would you prefer the risk and rewards of pursuing your own vision? Franchising is a continuing relationship wherein a franchisor provides a licensed privilege to the franchisee to do business and offer assistance in organizing, training, merchandising, marketing and managing in return for a monetary consideration
According to Section 42 (1) Companies Act 2016, a private company is also known as a company limited by shares and the number of shareholders must not exceed 50 people and the minimum number of shareholder is 1. With the following Section 11 (2) Companies Act 2016, there should have issued shares capital in a private company.
A franchise is simply investing money in a location or store, and then having the store become your own business after learning how to manage the entire business. You earn the majority of the profits, and you also don't have to worry about operations. You'll be taught by the company on how it run the entire business, and this is the reason why this is a huge and very easy way to become rich. Franchises require quite a hefty investment depending on the business you plan to buy. However, if the business is in high demand, there is profits to be made. Take for exMple the Cold Stone Creamery business. Countless people purchase one of their many franchises. The money is very good, the opportunities are endless, and the fact that there is no more need for advertising is what makes this more worth the investment in the long
It is a new corporate structure that combines the advantages of limited liability of a company at a low compliance cost and the flexibility of a partnership and. It is an alternative corporate business vehicle that provides the benefits of limited liability of a company, but it also allows its members to flexibly organize their internal management on the basis of a mutually arrived agreement just like in a partnership firm.
A joint venture is like a partnership, but only lasts for a set time. They make work on a project and dissolve afterwards. An S corporation is different from the other forms of corporation because of how the owners are taxed and the rules for shareholders. A limited liability company provides the same sort of rules for liability and taxation as a partnership, but members that are not heavily regulated. One last form of ownership is a cooperative. In this form individuals or small businesses come together to form a larger more beneficial
Our research topic is – “The process and advantages of purchasing a franchise business rather than starting your own business.” It is quite evident that business owners, that are not very well known of the competitive industry in the market, choose to side with buying a franchise to understand how a certain business runs. They use this experience and grow there on otherwise business owners use their gained expertise from franchise experience and implement them in the new business.