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Chapter 5 Small Business, Entrepreneurship, and Franchises - Coggle…
Chapter 5 Small Business, Entrepreneurship, and Franchises
Small business – one that is independently owned and operated for profit and is not dominant in its field
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Advantage of Small Biz
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Being his or her own boss, the owner-manager of a small business does not need anyone’s permission to adapt to change.
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Small Business Administration (SBA) – a governmental agency that assists, counsels, and protects the interests of small business in the United States
FRANCHISING
Franchise – a license to operate an individually owned business as though it were part of a chain of outlets or stores
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3 franchising agreements
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Used by sellers of passenger cars and trucks, farm equipment, and shoes
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A franchisor supplies brand names, techniques, or other services instead of a complete product.
Used by travel-related companies (Avis, Hampton Hotels) and restaurants (McDonald’s, SUBWAY)
advantages
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Gets the opportunity to start a business with limited capital and to make use of the business experience of others
Receives advice from the franchisor, often free of charge
Receives materials to use in local advertising and can take part in national promotional campaigns sponsored by the franchisor
May be able to minimize the cost of advertising, supplies, and various business necessities by purchasing them in cooperation with other franchisees
disadvantages
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Example: All Burger King French fries taste the same because all Burger King franchisees have to make them the same way.
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