Co-operatives are groups of people who agree to work together and pool their resources

1. Co-operatives are groups of people who agree to work together and pool their resources • All members have one vote, no matter how many shares they have bought • All members help in the running of the business. • The profits are shared equally amongst members Two common forms of co-operatives in UK are: Producer Co-operatives – which are groups of workers who design and produce products in just the same way as other manufacturing businesses Retail Co-operatives – which have the aim of providing their members with good quality consumer goods and services at reasonable prices

2. Close Corporations What are these? This type of business organization is similar to a private limited company but is quicker to set up. There are fewer rules and regulations about its formation and management. • There are limited to a maximum of ten people • A Simple founding statement, sent to the Registrar of Companies, is all that is needed to set up the organization. • The members are also the managers (No separation between ownership and control) • They are separate legal units offering both limited liability and continuity

3. Explain? Joint Venture Is when two or more businesses agree to start a new project together, sharing the capital, the risks and the profits. Advantages of Joint Ventures • Sharing of costs • Local knowledge when joint venture company is already based in the country • Risks are shared Disadvantages of Joint Ventures • If the new project is successful, then the profits have to be shared with the joint venture partner • Disagreements over important decisions might occur • The two joint venture partners might have different ways of running a business.

4. Franchise Explain? Is a business based upon the use of the brand names, promotional logos and trading methods of an existing successful business. The franchisee buys the licence to operate this business from the franchisor Advantages to the ‘Franchisor’ • The franchisee buys a licence from the franchisor to use the brand name • Expansion of the franchised business is much faster than if the franchisor had to finance all new outlets • The management of the outlets is the responsibility of the franchisee • All products sold must be obtained from the franchisor

5. Disadvantages to the Franchisor • Poor management of one franchised outlet could lead to a bad reputation for the whole business • The franchisee keeps profits from the outlet Advantages to the ‘Franchisee’ • The chances of business failure are much reduced because a well known product is being sold • The franchisor pays for advertising • All supplies are obtained from a central source – the franchisor • There are fewer decisions to make than with an independent business – prices store layout and range of products will have been decided by the franchisor • Training for staff and management is provided by the franchisor. • Banks are often willing to lend to franchisees due to relatively low risk

6. Disadvantages to the ‘Franchisee’ • Less independence than with operating a non-franchised business • May be unable to make decisions that would suit the local area • Licence fee must be paid to the franchisor and possibly a percentage of the annual turnover