Other Business Organizations Chap. 7

Franchises An individual buys the rights to own and operate a business. Usually fast-food. Franchisee – The one who buys the rights to run the business Franchiser – The one who sells the rights to run the business.

Franchising – Positives and Negatives Positives Fast growth for company Ready made business for buyer Usually well-known and established You are told how to run all aspects of business You can participate in major marketing campaigns Negatives Expensive (often $200,000+) Must pay royalties to franchiser Sometimes conflict btwn. franchisee and franchiser You have to do it franchisers way

Examples of Franchises Cost to start: $261,000 to $639,000 Cost to start: $300,000 to $1.5 million Cost to start: $300,000+ Cost to start: $101,000 to $285,000 Royalty – 8%

Nonprofit Organization Business doesn’t focus on financial gain for its members. Works like a business but pursues other goal than profit. Often structured like corporations Income not taxed

Examples of Nonprofits

Cooperatives (Co-ops) Collectively owned by their members  Housing co-ops – apartments, dorms  Marketing co-ops Ocean Spray Blue Diamond Welch’s Florida’s Natural

Coops cont. Credit union – banking co-ops Service co-ops – provide energy, health care Preschool co-ops – Secret Garden/Growing Garden