Chapter 3, Franchises and Co-operatives Flashcards
1
Q
Franchise
A
a business with a well-known brand name that lets a person or a group set up their own business using that brand
2
Q
Advantages of a Franchiser
A
- expanding costs less
- products are under franchisers direct control
- contniuous revenue
3
Q
Disadvantages of a Franchiser
A
- Control issue
- support such as training can be costly
- possible conflict
4
Q
Difference between a Franchiser and Franchisee
A
Franchiser is the original business, Franchisee is the new person or group
5
Q
Advantages of a Franchisee
A
- Tried and Tested brand name
- Specialist advice and training
- franchiser carries out market research
- easy to get a loan
6
Q
Disadvantages of a Franchiser
A
- supplies need to be bought, higher prices
- royalty payments
- less control over what they sell
- business cannot be sold without permission
7
Q
Co-operative
A
a business that’s owned and run by its members. Profits are shared between members rather than going to shareholders
8
Q
Advantages of a Co-operative
A
- legally straightforward
- common goal = motivation
- limited liability for members
- high-quality service
9
Q
Disadvantages of a Co-operative
A
- Capital can be limited
- Weak management
- Employees may feel underpaid
- slower decision making
