BA 101 ch 5

Advantages of starting an online franchise are: Multiple select question. no upfront fee may be required online franchisees can compete in world markets franchisees pay only a set monthly fee online franchisees have set and exclusive territories where they can do business

no upfront fee may be required online franchisees can compete in world markets franchisees pay only a set monthly fee

A major disadvantage of the corporate form deals with the tax situation called x taxation

Double Taxation

An LLC submits a written operating agreement, similar to a(n) x agreement, describing how the company is to be operated.

Partnership

A key advantage of a home-based franchise is low x costs, which can be ongoing. These are the costs associated with rent, utilities, and other fixed costs.

overhead

Termination of a partnership is difficult without a(n) ______ agreement.

Partnership agreement

A major disadvantage of the corporate form deals with the tax situation called x taxation

double taxation

What are some of the disadvantages of a corporation?

Cost of forming a corporation Double taxation

A partnership x can spell out the requirements of terminating a partnership.

Partnership Agreement

Rank the order in which members of a corporation are chosen in order to separate ownership from management. Start at the top of the managerial hierarchy.

1. Owners/stockholder elect board of directors 2. Board of directors hire officers of the corporation 3. Officers hire managers of the corporation 4. Managers hire employees

A state-chartered legal entity with authority to act and have liability separate from its owners is a:

Corporation

True or false: If producers, consumers, or workers with similar needs pool their resources for mutual gain, they have created a franchise.

False

True or false: Partnerships are less likely to survive than sole proprietorships.

False Reason: According to research. partnerships are four times as likely to succeed for a longer time.

Ed has decided to purchase and follow a business format by becoming a franchisee. The x x he will sign gives him the right to use the business name and sell the products of the firm.

Franchise Agreement

The right to use a specific business' name and sell its products or services in a given territory is a(n) x agreement

Franchise agreement

Mark, Cal and Aidan have decided to form a business where all owners will share in operating the business and in assuming liability for the business debts. They are most likely forming a(n) x partnership.

General partnership

Which of following are true about the advantages and disadvantages of being a franchise owner

Having a nationally recognized name for your business in a franchise can help with marketing and awareness While the upfront costs of a franchise may be steep, a franchise has a better chance of succeeding than starting a business from scratch

When two firms join together to form one new company, it is called a(n) x

Mergers

x owned businesses are growing at more than the national rate.

Minority owned business

A business that is owned and managed by one person is a(n) x x

Sole Proprietorship

If you start and manage a landscaping business on your own, you have likely started a:

Sole Proprietorship

An advantage of partnerships is a longer x rate than sole proprietorships, because they become more disciplined and the business's life is based on all the partners.

Survival

True or false: The main advantage of a sole proprietorship is ease of start up.

True

If your company debts or damages are solely your responsibility you could be experiencing the disadvantage associated with owning a sole proprietorship called x x

Unlimited Liability

A(n) ______ is where one company purchases the property and obligations of another.

acquisition

One company's purchase of the property and obligations of another is called a(n):

acquisition

In a franchise, having management support from the franchisor is a(n) x whereas the coattail effect is considered a x.

advantage disadvantage

A unique government creation that looks like a corporation but is taxed like sole proprietorships and partnerships is:

an S corporation

An advantage of the separation of ownership from management in corporations is that the company can raise money from investors but the investors:

are not involved in daily operations

A corporation is formally formed with:

articles of incorporation and bylaws

In addition to the articles of incorporation, a corporation has x, which describe how the firm is to be operated from both legal and managerial points of view.

bylaws

The actions of a fellow franchisee will affect your franchise. This is known as the x x

coattail effect

When producers, consumers, or workers with similar needs pool their resources for mutual gain, they start a(n):

cooperative

One of the most important advantages of the sole proprietor form of ownership is that a business owner:

finds it easier to start and end the business

An agreement that gives a business the right to use a business's name and sell a product or service in a given area is a(n):

franchise

Franchisors often use technology to meet the needs of both their customers and their x because technology makes communication faster and more widespread.

franchisees

A partnership where all owners share in operating the business and in assuming unlimited liability for the business's debts is a:

general partnership

LLCs do have to submit articles of organization and an operating agreement, but do not have to:

hold annual meetings file written resolutions keep minutes

Ending a partnership can be difficult because of problems deciding: Multiple select question. how to distribute assets the worth of a retiring partner's share whether to pay the taxes when a partner can retire

how to distribute assets the worth of a retiring partner's share when a partner can retire

A corporation is a legal x with authority to act and have liability separate from its owners.

legal entity

In a general partnership, all partners share the responsibility for operating the business and assume x for the business's debts.

liability

An S corporation has the liability protections of a corporation but is taxed:

like a partnership or sole proprietorship

Franchises are expanding internationally to access additional x that have new customers and to increase their profit potential.

markets

The result of two firms (usually corporations) combining to form one company is called a x

merger

About 20 percent of franchises are owned by African Americans, Latinos, Asians, and Native Americans. Franchisors are becoming more focused on recruiting x franchisees.

minority

Home-based franchises have many advantages, such as: Multiple select question. relief from the stress of commuting ease of obtaining financing feeling more isolated low overhead expenses

relief from the stress of commuting low overhead expenses

The easiest type of business entity to form is a

sole proprietorship

Because of the poor publicity at a fellow franchise location, you notice that sales at your location have decreased. The impact of the poor publicity on your company is referred to as

the coattail effect

Many franchises are expanding internationally because:

there are large new markets available

One of the most notable advantages of an online franchise is

there is no brick-and-mortar real estate cost.

Franchises are attractive to minority populations because: Multiple select question. they have a higher failure rate they are often unknown beyond a local area they provide personal ownership of a business some offer financial support to aspiring business owners

they provide personal ownership of a business some offer financial support to aspiring business owners

In a sole proprietorship, any debts or damages incurred by the business are your personal debts and you must pay them. This disadvantage is known as:

unlimited liability

Many brick and mortar franchisees are using ______ to expand their businesses online to lower costs and better meet the needs of their customers. Multiple select question. websites e-commerce technology personal sales

websites e-commerce technology

Many brick and mortar franchisees are using ______ to expand their businesses online to lower costs and better meet the needs of their customers.

websites technology e-commerce