Forms of Business Ownership - Cambridge Nationals

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  • Parnership
    • Examples: Estate agents, accountants, solicitors
    • Decision making can be time consuming as all partners need to be consulted, potential for disagreement
    • A business that is owned and controlled by two or more people
    • Partners each bring different skills to the company, the responsibility and risks are shared among the partners
    • Forms of Business Ownership
      • Franchise
        • Initial and ongoing costs of running a franchise are not cheap, as the franchisor may take a percentage of the profits or 'royalty fees', the franchisees are not allowed to input their own ideas and must stick to the marketing activities of the franchisee
        • A business organisation where the franchisor (the owner of the business idea) grants a licence for a franchisee to use their brand name and idea
        • Examples: Starbucks, Pizza Hut, McDonalds
        • Limited business knowledge is required as the business model is already created, an easy way to raise finance as the brand is already known by consumers
  • Easy to set up, owner makes all business decisions and keeps all profits
    • Sole Trader
      • A business owned and controlled by one person
      • Examples: Plumber, Electrician, Plasterer
      • Difficult of business to grow, banks are less likely to loan money, unlimited liability
      • Forms of Business Ownership
        • Franchise
          • Initial and ongoing costs of running a franchise are not cheap, as the franchisor may take a percentage of the profits or 'royalty fees', the franchisees are not allowed to input their own ideas and must stick to the marketing activities of the franchisee
          • A business organisation where the franchisor (the owner of the business idea) grants a licence for a franchisee to use their brand name and idea
          • Examples: Starbucks, Pizza Hut, McDonalds
          • Limited business knowledge is required as the business model is already created, an easy way to raise finance as the brand is already known by consumers

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