Question

Legal/Soc Environment BUS 263

Many students will find jobs working with various small businesses. Which of these different types of small business or franchise would you think is more advantageous? Why?

Types of small businesses:

1. Sole proprietorship- The simplest form of business organization, in which the owner is the business. The owner reports business income on his or her personal income tax return and is legally responsible for all debts and obligations incurred by the business.
2. Partnership- an agreement, expressed or implied, between two or more persons to carry on a business for a profit. Partners are co-owners of the business and have joint control over its operation and the right to share in its profits.
3. Franchises- Any arrangement in which the owner of a trademark, trade name, or copyright licenses another to use that trademark, trade name, or copyright in the selling of goods or services. EX: McDonald’s, 7-Eleven, Holiday Inn.

Types of Franchise:

1. Distributorship- a manufacturer (the franchisor) licenses a dealer (the franchisee) to sell its product. EX: Automobile dealerships, beer distributorships.
2. Chain-style business operation- a franchise operates under a franchisor’s trade name and is identified as a member of a select group of dealers that engage in the franchisor’s business. EX: fast-food chains, real estate brokerage firms (Century 21), tax-preparing services (H&R Block).
3. Manufacturing, or processing-plant, arrangement- the franchisor transmits to the franchisee the essential ingredients or formula to make a particular product. The franchisee then markets the product either at wholesale or at retail in accordance with the franchisor’s standards. EX: Pepsi-Cola and other soft-drink bottling companies.

Answer 1

Every business its own pros and cons. Either you do sole propritership or partnership or it may be franchise, every business type has advantage and disadvantage. Below here are some advantages and dis advantages of each business.