Introduction To Business Types Of Business And Franchises

Question 1

Differences between a private and public limited company

Answer 1

Public have to display its finances

A second difference is anyone can buy shares in a public business

Question 2

Explain one reason that a business may prefer to set up as a private limited company rather than a public limited company

Answer 2

Generals public cant see finances

To raise profits a private limited company can sell shares to family and friends

Question 3

One reason a business may prefer to set up us as a public limited company rather than a private limited company

Answer 3

They can sell shares to anyone

Question 4

Franchise

Answer 4

A franchise is a business licensing name products and logo for example McDonald’s

Question 5

Franchisor

Answer 5

Owns the trademark + business model

Question 6

Franchisees

Answer 6

The person who owns and operates a business under the trademark

Question 7

Royalty payment

Answer 7

A payment made by one party to another for the ongoing use of their brand

Question 8

Disadvantage of franchise

Answer 8

Monthly payments

No flexibility can’t change menus etc

Question 9

Identify two advantages of franchises for the franchisee

Answer 9

Growth of brand

Finances

Question 10

Describe one reason that control may be an issue for the franchiser

Answer 10

They are unable to change anything

Question 11

Explain what is meant by a co operative

Answer 11

business or organisation that’s owned and controlled by its members, to meet their shared needs