Acquiring a Business Flashcards
BUSINESS
Why might an entrepreneur choose to buy an existing business?
Established customer base, existing equipment, immediate income
What is an advantage of buying a franchise?
Known brand, established system, support from franchisor
What is a disadvantage of buying a franchise?
High initial fees, limited control, ongoing royalties
What are some contractual implications of a franchise agreement?
Rules to follow, fees to pay, territory restrictions
What is an advantage of outsourcing?
Reduced costs, access to specialized skills, focus on core business
What is a disadvantage of outsourcing?
Loss of control, communication problems, potential quality issues
What are some contractual implications of outsourcing?
Service level agreements, confidentiality, payment terms
What is an advantage of leasing?
Lower upfront costs, flexibility, avoids asset depreciation
What is a disadvantage of leasing?
No ownership, ongoing payments, potential restrictions
What are some contractual implications of leasing?
Lease terms, maintenance responsibilities, potential penalties
