Chapter 4-entrepreneurship
franchisor agreement
the __________ _________ explains what the franchisor is obligated to do for their franchisees & details the rights and obligations of the franchisees.
what are 3 advantages of starting your own business from scratch
1. get to make own decisions 2. create own destiny 3. completely independent
what are 6 reasons why a business might want to sell their business
1. insufficient profits 2. worry about economic conditions 3. fear of new competition 4. owner retiring 5. death of a partner 6. desire to do something different
what are 3 disadvantages of buying an established business
1. many are for sale because they are not making a profit 2. serious problems may be inherited 3. money is required
what are 3 disadvantages of starting your own business from scratch
1. no brand awareness 2. no training awareness 3. no training or assistance
what are 3 disadvantages of entering into a family business
1. senior management positions held by eldest members 2. family politics 3. difficult to retain quality employees
what are 3 advantages of buying an established business
1. already has established customers and employees 2. the seller may train the new owner 3. easier to borrow money
what are 2 advantages of entering into a family business
1. can make lots of money 2. sense of mission
name 2 things the evaluate when looking at different franchises to possibly buy
1. compare costs and royalty fees 2. historical franchisee performance/satisfaction
what are 3 disadvantages of buying a franchise and becoming a franchisee
1. cost a lot of money 2. royalty fees cut into profits 3. less freedom to make decisions
advertising fees
fees paid to support television, magazine, or other advertising of the franchise as a whole
what are 4 ways entrepreneurs can go into a business for themselves
1. purchase an existing business 2. enter unto a family business 3. but a franchise 4. start a brand new business from scratch
what costs are usually considered start-up costs
1. rent 2. equipment 3. inventory
what are 3 advantages of buying a franchise and becoming a franchisee
1. well-known brand awareness 2. cost savings on equipment/supplies 3. consistency guaranteed by all franchisees
franchise
a _________ gives the individual the right to market a company's products or services in a particular area.
define business broker
a professional who earns their living selling businesses of others
franchisee
individual who purchases the rights to use the company's trademarked name, use the established business model to do business, and market the company's products or services in a particular way
franchisor
owns the overall rights and trademarks of the company and allows its franchisees to use these rights and trademarks to do business
initial franchise fee
the fee the franchise owner pays in return for the right to run the franchise
royalty fees
weekly or monthly payments made by the owner of the franchise to the seller of the franchise
