Chapter 7: Pathways to Entrepreneurial Ventures

Business broker

professionals specializing in business opportunities often can provide leads and assistance in finding a venture for sale

company's profitability

the amount of net profit a company produces after expenses

goodwill

the amount of value created by an owner of a business in terms of his or her time, effort, and public image with the business itself

franchise fee

the initial amount of money needed to purchase a franchise

Franchise Disclosure Document

FTC established requirement for franchisors to make full presale disclosure nationwide; must be presented to prospective buyers of franchises in the presale disclosure process 10 days before contracts are signed (FDD)

franchisor control

generally exercises a fair amount of control over the operation in order to achieve a degree of uniformity

legal restraint of trade

a legal document signed by the seller of a business that restricts him or her from operating in the same business for a reasonable amount of time and within a reasonable geographic jursidiction

new-new approach

a start up approach to business in which the concept is a brand new idea to the marketplace

new-old approach

a start up approach to business in which the concept provides a new angle to something that already exists in the marketplace

profit trend

a venture's ability to generate a profit over a sustained period

non-compete agreement

an agreement that the previous owner will refrain from conducting the same business within a reasonable distance for a period of at least 5 years

franchisor

an individual or company who offers to sell or license his operation in the form of a franchise

franchisee

an individual who purchases and operates a franchise

franchise

any arrangement in which the owner of a trademark, trade name, or copyright has licensed others to use it to sell goods or services

unscrupulous practices

business practices that are devoid of ethics and seek personal gain at any cost

risk versus reward

examining overall gains and losses; points out the importance of getting an adequate return on the amount of money risked

upside gain and downside loss

within the financial capital domain, this is the best possible gain weighed against the worst loss possible