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Choosing The Right Legal Structure For The Business

Choosing The Right Legal Structure For The Business. AS Business Studies. Aims & Objectives. Aim: Understand social enterprises and franchises. Objectives: Define social enterprises and franchises Explain the difference between a franchisee and franchisor

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Choosing The Right Legal Structure For The Business

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  1. Choosing The Right Legal Structure For The Business AS Business Studies

  2. Aims & Objectives Aim: • Understand social enterprises and franchises. Objectives: • Define social enterprises and franchises • Explain the difference between a franchisee and franchisor • Analyse the benefits and drawbacks of both legal structures

  3. Starter – You Say We Pay Sole Trader • Key word on board behind a students’ head. • Rest of class has to define the key word without using the words in the key word.

  4. Legal Structures • Sole Traders • Partnerships • Private Limited Companies • Public Limited Companies • Not-for-profit businesses • Franchises

  5. Not-For-Profit Businesses • Not-for-profit organisations are businesses that trade in order to benefit the community. • These businesses have social aims as well as trying to make money. • Examples of social aims are job creation and training, providing community services etc. • Examples of NFPBs are housing associations, training centres, and sports clubs.

  6. Not-For-Profit Businesses • Jamie Oliver • Restaurant ‘Fifteen’ • http://www.youtube.com/watch?v=UG88ux-OmNE

  7. Not-For-Profit Businesses • Benefits of social enterprises structures. • Drawbacks of social enterprise structures.

  8. Social Enterprises Benefits Drawbacks Profit and social aims may be conflicting objectives. Profits may be just sufficient to carry on, with lower returns than a profit making business. • The more successful the enterprise the more society benefits. • Customers may be more willing to buy from a social enterprise. • Might be easier to recruit staff. • Grants may be available to fund it.

  9. Franchises • A business structure in which the owner of a business idea (franchisor) sells the right to use that idea to another person (the franchisee) usually in return for a fee, and share in any profit the franchisee makes.

  10. Franchises • Advantages and disadvantages to Franchisor. • Advantages and disadvantages to Franchisee. • http://www.youtube.com/watch?v=PeTWWRQ3mYQ

  11. Franchisor +/- Benefits Drawbacks Potential loss of control about how the product/service is presented to customers. May be difficult to control quality. Communication may break down. • Can expand business quickly. • Risk is shared. • Franchisee will learn revenues for the franchisor.

  12. Franchisee Benefits Drawbacks % of revenue paid to franchisor. Right to operate as franchise could be withdrawn. • Able to sell an already recognised brand. • Take advantage of central services such as marketing, training and stock control.

  13. Franchises • A business structure in which the owner of a business idea (franchisor) sells the right to use that idea to another person (the franchisee) usually in return for a fee, and share in any profit the franchisee makes.

  14. Plenary • What is meant by the term Franchisee? (2 Marks) June 2011

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