Franchises and co-operatives Flashcards
1
Q
What is a franchise?
A
When a big well known business let’s a person or a group of people set up their own business in that name.
2
Q
Advantages for franchiser
A
- inexpensive
- products sold are under franchisers control
- applicants are carefully selected
3
Q
Disadvantages for franchiser
A
- control issues
- cost
- conflict
4
Q
Advantages for franchisee
A
- already well known
- specialist advice and training
- no need to carry out market research
- easier to take a loan
5
Q
Disadvantages for the franchisee
A
- supplies need to be bought from franchiser
- continuing payments
- less control compared to if they started their own business
- cannot be sold without franchisers permission
6
Q
What is a cooperative?
A
A business owned by its members who then elect who is going to manage the business. Members also share profit amongst each other.
7
Q
Advantages of a cooperative
A
- legally straight forward
- all involved are working towards a common goal
- limited liability
- high quality service
8
Q
Disadvantages of a cooperative
A
- limited capital
- weak management
- employees may want more
- slower decision making
