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Private sector businesses 2.

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Introduction

Private Sector Businesses 2 Franchises A franchise is a way of owning a business without taking the normal risks of starting out on your own. It is little wonder, then, that it is so popular! Benetton, Prontoprint, Wimpy, Kentucky Fried Chicken, BSM and Body Shop are all examples of franchises. These are enterprises where a small shop or outlet is run by a franchisee, who has been given permission to operate the business by a franchisor the organization which owns the product or service being sold. The franchisee gets the benefit of the franchisor's expertise in marketing and operations. The franchisor will often supply the raw materials or stock for sale, provide shop displays and give help and advice to the franchisee, who usually has the exclusive right to operate in a certain geographic area. The franchisee has the responsibility of running the business on a day-to-day basis and can keep most of the profits. However, he or she must raise most of the capital and pay an initial licensing fee to the franchisor. ...read more.

Middle

* Most of the profit is retained by the business owner. Disadvantages: * Some of the profit has to be paid to the franchisor. * The owner is not free to make all of his/her own decisions, particularly as to the product range or the prices at which to sell their goods or service. * Only the franchisor's good(s) or service(s) can be sold. * The franchisee is largely dependant on the popularity of the franchisor's product or service and the amount of advertising undertaken by the franchisor. * There is a danger that the franchisee will 'sign up' with a disreputable organization which takes his/her initial payments for little or no return. * Long hours and few holidays. * Business success is dependant on the skill of the franchisee and the strength and dependability of the franchisor. If either are lacking, the business may fail. Cooperatives What is the difference between Pulp and Oasis? You may give many different answers but it is unlikely that you would know that Oasis' songwriting royalties are split unequally (no prizes for guessing that Noel Gallagher has the biggest share!) ...read more.

Conclusion

* Jobs can be rotated so that everyone can have a turn at the pleasant jobs as well as the not so pleasant. * The workers themselves are not forced to be owners - each worker can decide for him or herself. Disadvantages: * Although special forms of finance are available for cooperatives, some organizations (banks, insurance companies etc.) may hesitate about dealing with cooperatives because there is no recognized leader who takes responsibility. * Suppliers may be reluctant to sell goods on credit for the same reason. * Job rotation means that some people will do jobs they are not trained, or ill-equipped, to do. * Decision making can take a long time if there are a lot of people to consult. * Disciplining or sacking may be difficult to do if everyone is 'friends together'. * Good leaders may be stifled and feel they cannot develop their full potential. * Decisions which are made for the good of the workforce may not be the best for the firm, e.g. a new machine which will produce better quality goods but ill make three workers redundant may be rejected. By Laurence Osborne ...read more.

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