BS1- Types Of Business And Franchises Flashcards
Identify two differences between private and public limited company8
In a private company shares to the family and friends
Explain one reason that a business to set up as a private limited company rather than a public limited company 
They have a much lower chance of being taken over as they know who is buying shares
Explain one reason That a business may prefer to set up as a public limited company rather than a private limited company
As a public limited company they can sell shares to anyone on the stock market where as a private limited company can only sell to friends and family
State two reasons but it may be more suitable for a business to set up as a sole trader than a private limited company
Decision-making will be a lot faster
100% of the profit can be yours and does not be share in dividends 
Distinguish between private limited companies on the private sector
Private sector is the generic term where is a private limited company is a small part which contributes
Distinguish between franchises and franchisees
Franchisor is the person who sells the right to use the business
Franchisee is the person who buys rights to set up and run the business
Explain what is meant by a royalty payment
This is a percentage of the profits the franchiser will get off the franchisee
Explain one other disadvantage of franchises for the franchisee
They have to comply to the rules and regulations set by the franchiser
Identify two advantages of franchises for the franchisee
The business it already has a reputation
If any help is needed in the franchise can help
Describe one reason that control may be an issue for a franchisor 
They are unable to go around all the time so may lose control 
Explain what is meant by franchise
The franchise is a chain of businesses which can be bought and then run individually in return to royalties
