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Franchises_ Co-ops _ Charities SOLS

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					FRANCHISE

Definition         Business buys a license to operate a well known firm
Ownership          Owned by Franchisor
Finance & Profit   Franchisee pays Franchisor to get license as well as a royalty
Control            Franchisees runs business on Franchisor’s guidelines
                   +                                          -
   •   Franchisor provides a lot of           • Franchisee doesn’t have
       support; Training to start                complete freedom
       business, equipment, materials,        • May not agree with decision
       advice, brand name                        placed upon you

   •   Take over a successful, winning
       formula

Franchise - Permission to use a franchise name and to sell using that franchise
in a particular locality

Franchisor - The business granting a franchise

Franchisee - A business or group of individuals benefiting from someone else’s
trading name and experience

Royalty - A share of profits paid by the Franchisee to the Franchisor

Examples

McDonald’s
Benetton

McDonald’s Franchisees go to Hamburger University to learn every aspect of the
business. They sign an agreement for 20 years using the McDonald’s franchise
but they cannot have any other business interests.




Types of Business Organisations    M. McGowan                                     1
CO-OPERATIVE

Definition       Organisations set up to benefit workers or consumers
Ownership        Retail – owned by workers and shoppers
                 Producer – owned by workers
Finance & Profit Retail – every pound spent receives dividend or voucher
                 Producer – money comes from workers who share profits and
                 share a salary
Control          Board of Directors (who may also be workers)
                  +                                        -
   • Less conflict between workers         • Difficult to grow and find
       and managers                            additional capital

   •   Workers should be more              •   New workers may not be able to
       motivated                               raise capital needed to join co-
                                               op



Examples

The Co-Op
John Lewis

John Lewis offers every permanent member of staff a share of profits and a
say in how the organisation is run through staff committees and democratic
debating forums




Types of Business Organisations   M. McGowan                                 2
CHARITY

Definition         An organisation formed to raise money for underprivileged
                   people
Ownership          Trustees
Finance & Profit   Charities raise money through shops, donations and lottery
                   money

                   Surplus after costs goes to the ‘needy’
Control            Board of Managers
                   +                                         -
   • If charity has status of                • Less money may be donated due
       charitable trust it doesn’t pay           to introduction of lottery
       tax
                                             • Relies on voluntary workers who
   • Looks after less privileged and             may not be paid for work
       the environment

Trustee - People responsible for managing and administering a charity




Types of Business Organisations    M. McGowan                                   3

				
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