BTEC national- Unit 1- Introducing the hospitality industry- Ownershup

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  • The structure and services of the hospitality services
    • Sole Trader
      • Any business that is owned and controlled by one person- they may employ workers
        • Advantages- 1.Owner can keep all of the profits. 2. Business is easy to set up, with few start-up costs.
          • Disadvantage- 1. Unlimited liability- if business gets into debt, owner is the only one to pay it. 2. No one to share risks and decision making with
        • Disadvantage- 1. Unlimited liability- if business gets into debt, owner is the only one to pay it. 2. No one to share risks and decision making with
    • Patnerships
      • Business owned by two or more people.
        • Advantages- 1. Access to a wider range of skills, talents and ideas. 2. More capital money can be made to run and expand business.
        • Disadvantage- 1. The profits have to be shared. 2. Business partners may not get along.
    • Limited companies
      • Private limited companies
        • Often small businesses and family run.
          • Advantages-  1. Easier to raise funds to help the business survive/grow. 2. Shareholders have limited responsibility.
          • Disadvantage- 1. Control of the company becomes more spread as the structure grows. 2. More complicated to set up.
      • Public limited companies
        • Large businesses, shares are usually traded on the stock exchange and can bought on the stock exchange.
          • Advantages- 1. The value of the shares can go up. 2. The shareholders have limited responsibility for the business.
          • Disadvantages- 1. The business can be hard to set up with more legal formalities involved. 2. The value of the shares can go down.
    • Franchises
      • Where the franchise owner allows another business, the franchisee, to trade under its name and copy its business.
      • For franchiser:
        • Advantages- 1. Earn more money from franchisee. 2. the business can grow quickly.
        • Disadvantage- 1. if franchisee is bad, then makes company look bad.
      • For franchisee:
        • Advantages- 1. The franchiser provides advertising, packaging and equipment. 2. Gain an established business name and brand.
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