Methods to Initiate Ventures © 2014 Cengage Learning. All rights reserved. This edition is intended for use outside of the U.S. only, with content that may be different from the U.S. Edition. May not be scanned, copied, duplicated, or posted to a publicly accessible website, in whole or in part.

Chapter Objectives (cont’d) To examine the benefits and drawbacks of franchising To present the franchise disclosure document (FDD) as a key item in franchises © 2014 Cengage Learning. All rights reserved. This edition is intended for use outside of the U.S. only, with content that may be different from the U.S. Edition. May not be scanned, copied, duplicated, or posted to a publicly accessible website, in whole or in part.

The Pathways to New Ventures for Entrepreneurs Acquiring an Existing Venture Creating the New Venture Obtaining a Franchise Pathways to New Ventures © 2014 Cengage Learning. All rights reserved. This edition is intended for use outside of the U.S. only, with content that may be different from the U.S. Edition. May not be scanned, copied, duplicated, or posted to a publicly accessible website, in whole or in part.

Approaches to Creating a New Venture Creating New Ventures Approaches to Creating a New Venture New-New Approach New-Old Approach © 2014 Cengage Learning. All rights reserved. This edition is intended for use outside of the U.S. only, with content that may be different from the U.S. Edition. May not be scanned, copied, duplicated, or posted to a publicly accessible website, in whole or in part.

Acquisition of an Established Business Venture Acquiring an Established Entrepreneurial Venture Asking Key Questions Examination of Opportunities Evaluation of the Venture Personal Preferences © 2014 Cengage Learning. All rights reserved. This edition is intended for use outside of the U.S. only, with content that may be different from the U.S. Edition. May not be scanned, copied, duplicated, or posted to a publicly accessible website, in whole or in part.

Advantages of Acquiring an Ongoing Venture Buying an Ongoing Venture Purchasing at a good price Reduced time and effort Less fear about successful future operation © 2014 Cengage Learning. All rights reserved. This edition is intended for use outside of the U.S. only, with content that may be different from the U.S. Edition. May not be scanned, copied, duplicated, or posted to a publicly accessible website, in whole or in part.

Evaluation of the Selected Venture Factors Affecting Sale of the Venture Assets of the venture Profits, sales, and operating ratios The business environment © 2014 Cengage Learning. All rights reserved. This edition is intended for use outside of the U.S. only, with content that may be different from the U.S. Edition. May not be scanned, copied, duplicated, or posted to a publicly accessible website, in whole or in part.

Factors Affecting Negotiations Negotiating the Deal Factors Affecting Negotiations Alternatives Time Pressure Information © 2014 Cengage Learning. All rights reserved. This edition is intended for use outside of the U.S. only, with content that may be different from the U.S. Edition. May not be scanned, copied, duplicated, or posted to a publicly accessible website, in whole or in part.

Considerations When Buying a Business Request that the seller retain a minority interest in the business or make the final purchase price dependent on the performance of the business over a three-to-five-year span. Be wary of any promises made without written corroboration. Spend time reconstructing financial statements to determine how much cash is actually available. Interview the owner, vendors, competitors, customers, and employees. © 2014 Cengage Learning. All rights reserved. This edition is intended for use outside of the U.S. only, with content that may be different from the U.S. Edition. May not be scanned, copied, duplicated, or posted to a publicly accessible website, in whole or in part.

Franchising: The Hybrid Any arrangement in which the owner of a trademark, trade name, or copyright has licensed others to use it in selling goods or services. Franchisee A purchaser of a franchise Franchisor The seller of the franchise © 2014 Cengage Learning. All rights reserved. This edition is intended for use outside of the U.S. only, with content that may be different from the U.S. Edition. May not be scanned, copied, duplicated, or posted to a publicly accessible website, in whole or in part.

Franchising Advantages Disadvantages Training and guidance Brand-name appeal A proven track record Financial assistance Disadvantages Franchise fees Franchisor control Unfulfilled promises of franchisor © 2014 Cengage Learning. All rights reserved. This edition is intended for use outside of the U.S. only, with content that may be different from the U.S. Edition. May not be scanned, copied, duplicated, or posted to a publicly accessible website, in whole or in part.

Franchise Law Franchise Disclosure Document (FDD) Is divided into 24 items that provide different segments of information for prospective franchisees. Was developed to provide guidance in complying with the Franchise Disclosure Rule that requires franchisors to make full presale disclosure about their franchises. © 2014 Cengage Learning. All rights reserved. This edition is intended for use outside of the U.S. only, with content that may be different from the U.S. Edition. May not be scanned, copied, duplicated, or posted to a publicly accessible website, in whole or in part.

Evaluating Franchising Opportunities Seeking Professional Help Investigating the Franchisor Finding Reliable Information The Franchise Opportunity Decision © 2014 Cengage Learning. All rights reserved. This edition is intended for use outside of the U.S. only, with content that may be different from the U.S. Edition. May not be scanned, copied, duplicated, or posted to a publicly accessible website, in whole or in part.