ch 4 homework

Why has Sonic experienced great business success over the past 60 years?

It chose the right form of business ownership over the years.

Which form of ownership was Domino's in the beginning?

partnership

What form of business ownership did Troy Smith select when he first made the decision to be an entrepreneur?

sole proprietorship

4. Jordan has just completed his first year of operation as a sole proprietor of a successful marketing firm. Realizing a significant profit, he is happy that he does not have to worry about double taxation of his earnings.

Advantage of a sole proprietorship

2. Financial advice and assistance

Advantage of franchising

4. Lower failure rate

Advantage of franchising

5. Management and marketing assistance

Advantage of franchising

7. Nationally recognized name

Advantage of franchising

9. Restrictions on selling

Disadvantage of franchising

What is the best form of business ownership?

One is not better than another.

Which aspect of its business is Domino's always willing to adapt in order to ensure it meets the wants and needs of its consumers in all its global locations?

product

What is the biggest advantage of opening a Domino's franchise?

reputation in the market

The three types of business ownership include: partnerships, corporations, and

sole proprietorships.

If a sole proprietor is found negligent of an action, then that person could face

unlimited liability.

8. Personal ownership

Advantage of franchising

Someone who desires to start/run a business, but is not comfortable with the idea of having a new product or service should consider

a franchise.

If one owner of a partnership makes a bad decision that ends up in the business being sued, then

all partners face unlimited liability.

A legal and binding form of business ownership whereby someone with a good idea for a business sells the rights to use the business name and sell a product or service to others in a given territory is known as a(n)

franchise.

Which of the following is an advantage of operating a franchise?

nationally recognized name

According to the video, which business model is deemed the greatest ever developed?

the franchise system

Under the franchise model, if PODS were to engage in dubious/controversial activities, then franchisees might see a decline in business. This is known as

coattail effect.

As the Sonic brand grew, Troy Smith formed a business relationship with Charlie Pappe. This form of business ownership was a

limited partnership agreement.

Sole Proprietorship There are three major forms of business ownership in the United States. These include sole proprietorships, partnerships, and corporations. There are more sole proprietorships in the United States than any other business type. There are distinct advantages of starting and managing a small business, but there are potential drawbacks as well. A sole proprietorship is a business that is owned, and usually managed, by one person. Sole proprietorships make up approximately 72% of all business in the United States. Read the descriptions and select whether each item is an advantage or disadvantage of a sole proprietorship.

next 6 qs

1. Abigayle has recently started her business as a sole proprietorship. All she did to get started was post an announcement in the local paper and obtain all the appropriate local licenses.

Advantage of a sole proprietorship

3. Hunter has just completed his first year of operation as a sole proprietor of a successful sporting goods store. There were challenges but he was excited about getting to keep all the profits of the venture to himself.

Advantage of a sole proprietorship

PODS changed from a sole proprietorship to a corporation. What would be a major reason for making this ownership change?

the ability to grow rapidly

Read the descriptions of each company and match it with the most appropriate form of business. 1. Partnership 2. Sole proprietorship 3. Corporation 4. LLC

1. Magic City Ice Cream: Scott, with expertise in marketing and sales, and Stacy, with experience in management, opened an ice cream parlor together. They share the profits and responsibilities equally. 3. RST Inc.: A group of colleagues opened a paintball arena. They wanted to limit the liability of the owners so the investors didn't encounter any personal losses. Additionally, they wanted those who helped with the start-up costs to have a share of the profits. 4. Smile Dental: Dr. Berry decided to open a dental office on his own. He wanted his personal assets protected in case of malpractice but didn't want the hassle that comes along with traditional incorporating. 2. Taylor Marketing: Taylor began a marketing consultant business on her own. The risk is minimal and there is no need for additional start-up capital.

Match each term with its definition. 1. Unlimited liability 2. LLC 3. Horizontal merger 4. Vertical merger 5. Franchisee 6. Conglomerate merger 7. Franchisor 8. General partnership

6. Merger between two or more companies that are involved in totally unrelated business activities. 5. The party that buys the right to use a business's products, brand, business format, trade secrets, and so on. 7. The party that sells to another party the rights to use its business format, proprietary knowledge, products, and so on. 8. Business entity with two or more owners who own and operate the business and assume unlimited liability. 3. Joining of two or more companies in the same industry and/or with similar product lines. 2. Corporate structure in which investors have limited liability; similar to S corporations without eligibility requirements. 1. Full responsibility to pay the debts or obligations of a legal entity. 4. Joining of two or more companies in similar industries but in different stages or steps of the manufacturing process.

Match each term with its definition. 1. Partnership 2. S corporation 3. Merger 4. Sole proprietorship 5. Franchise 6. Cooperative 7. Acquisition 8. Limited partner

7. A corporate action in which one company buys the assets and obligations of another company and assumes control. 6. A corporate action in which one company buys the assets and obligations of another company and assumes control. 5. A form of business in which one party gives another rights to sell its products or services and use its business format in a certain geographic area. 8. An individual who has shared ownership in a partnership but takes no part in managing it and has limited liability. 3. The joining of two or more business entities into a single entity. 1. Business entity with two or more owners who share management and profits or losses. 2. Entity taxed like a sole proprietorship or partnership but maintains benefits of incorporation like limited liability. ;4. An unincorporated business with one owner.

2. Ethan is married with four kids. He has a mortgage, a car payment, and several other bills. He has thought about starting a small business. He's excited about the potential of his business ideas, but he's also concerned about the risk of personal losses associated with starting his business as a sole proprietorship.

Disadvantage of a sole proprietorship

5. Laura has owned her business for approximately one year. During this year, she has realized that she underestimated how much time running her small business would take. On average, she works 80 hours per week.

Disadvantage of a sole proprietorship

6. LuAnn has owned her small business for three years as a sole proprietorship. The business has grown during those three years. LuAnn realizes she needs additional funds, but the funds available to the business are limited to what she can gather alone.

Disadvantage of a sole proprietorship

1. Coattail effects

Disadvantage of franchising

10. Shared profit

Disadvantage of franchising

3. Large start-up costs

Disadvantage of franchising

6. Management regulation

Disadvantage of franchising

Franchising A franchise is the right to use a specific business's name and sell its products or services in a given territory. Franchises are one of the two special forms of business ownership that are additions to the three major forms of business ownership. Some people, uncomfortable with the idea of starting their own business from scratch, would rather join a business with a proven track record through a franchise agreement. A franchise agreement is an arrangement whereby someone with a good idea for a business (the franchisor) sells the rights to use the business name and sell a product or service (the franchise) to others (the franchisees) in a given territory. A franchise can be formed as a sole proprietorship, a partnership, or a corporation. Franchises provide distinct advantages of starting and managing a small business, but there are potential drawbacks as well. Select whether each item is an advantage or disadvantage of franchising.

Next ten qs

If a corporation is formed, then the owners are known as

shareholders.