Unlock the potential of business ownership with "Avenues of Acquiring a Business," a comprehensive guide that explores franchising, leasing, and outsourcing as viable pathways. Learn the definitions and roles of franchisors, franchisees, lessors, and lessees, and understand the contractual implicat...
Franchising: marketing concept whereby the franchisor licenses the use of its business
model, brand, procedures + sell branded g/s to franchisee → In return, franchisce pays
certain fees + agrees to comply with obligations
Franchisee: pays a fee to frarchisor for right to use trademark + proprietary Knowledge
Franchisor: person or company that runs business model + related trademarks
Leasing: contract outlining terms under which 1 party agrees to rent g/s owned by another
party
Lessor: someone who grants a lease to someone else (owner of asset)
Lessee : person who rents asset from lessor (known as tenant)
Outsourcing: agreement in which 1 company hires other co to supply g/s that could be
done internally by employees
Profitable: when B is making or likely to make a profit (incomes - expenses)
Why Buy An Existing Business?
Established Business
→ should not take up to much time to set up as all requirements already in place
, Established Customer base
→ establioned businesses have an existing customer base
Name + Reputation
→ company can come with goodwill from established reputation
↳ people are creatures of habit = people will shop store be they have done it before
↳ state of transfer of ownership includes phone number, website and name
Known Market
→ market research has already been done for business
→ Owner can use past info to form future plans
Mentorship
→ starting a business can be overwhelming
→ owner of existing business may agree to mentor for some time
Cash flow
→ already has customers + continued cash flow
→ Start up can take long time to attract new customers + get cash
→ offers greater security over working capital + help owner improve cash flow sooner
Financing
→ existing B = 3+ years of profitable financials which makes it easier to seure financing
from bank, gov, venture capitalist
Current Staff
→ 1 in 10 start -ups make it past the 2nd year and many fail during growth as businesses
tries to hire more staff.
→ having trained staff in place ensures a smooth transfer and contributes to the success
of business
Market position
→ entrepreneur buys an existing business can increase market position
→ can also increase customer base, marker share + resources
Franchising
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller apseynicole. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $2.85. You're not tied to anything after your purchase.
