1. Methods to Initiate Ventures
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2. 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.

3. The Pathways to New Ventures for Entrepreneurs
Acquiring an Existing Venture
Creating the New Venture
Obtaining a Franchise
Pathways to New Ventures
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4. 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.

5. 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.

6. 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
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7. 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.

8. Factors Affecting Negotiations
Negotiating the Deal
Factors Affecting Negotiations
Alternatives
Time
Pressure
Information
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9. 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.

10. 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.

11. 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.

12. 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.

13. 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.