Generating and Protecting Business Ideas

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  • Created by: amy
  • Created on: 14-05-13 19:48

Key Terms

  • FRANCHISE- A legal agreement which allows a business to trade under the name of another business and have the right to supply their products/service.
  • FRANCHISEE- The person/business who buys the right to trade under the name of an already established firm.
  • FRANCHISOR-The business who owns the rights to the franchise and who sells these rights to third-parties.
  • PATENT- Legal protection against the copying of newly invented products or manufacturing process
  • COPYRIGHT- Legal protection against copying for the work of authors, composers and artists
  • TRADEMARK- Signs, logos, symbols or words which distinguish a brand from rival businesses
  • NICHE MARKET- A small segment of the market in which all of the nice share a common characteristic
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Sources of New Business Ideas

  • Spotting a Trend
  • Identifying a gap in the market
  • Copying ideas from other countries
  • Brainstorming
  • Adopting a scientific approach
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Franchisor

ADVANTAGES

-Allows rapid growth of business idea and greater promotion of your brand

-Can start to benefit from greater Economies of Scale

-It is the franchisee who provides the capital for the expansion

DISADVANTAGES

-Loss of control over the daily running of every outlet

-Need to manage growth and resources carefully

-A failed franchisee might result in a legal case

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Franchisee

ADVANTAGES

-More likely to be a success as an established brand

-Franchisor provides training and support

-Banks more likely to lend as franchises carry lower risk

DISADVANTAGES

-You NEVER have total control

-High start up costs

-Have to pay regular loyalty to franchisor

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Issues Surrounding Patents

PROBLEMS

-patents are only valid for the country in which they have been registered

-The patent process can be very expensive if you need to apply for a global patent

-there is no enforcing agency for patents

BENEFITS

-patents encourages businesses to invest money into research and development

-a patent holder can licence its idea to others for the generation of a fee

-sucessful patents can protect you against rival businesses copying your ideas and allow you to generate higher levels of products

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