Explain - FA3

For people who want to become business owners, but are not entrepreneurial - what is the best pathway option?

• enter into a franchise agreement

• buy an existing business

• open a new business

Which of the following is NOT a feature of buying an existing business?

• There is a moderate level of risk for business owners

• elements of the business such as name, location, staff etc are already established

• value of the business reputation forms part of the purchase price

• The business owners would have prepared a feasibility report

A ​ (a)   allows someone who aspires to be a ​ (b)   to own a business under the guidance and ​ (c)   of the large business head office.

• franchise
• business owner
• licensing
• new business
• support
• manager

the company that sets up the franchise arrangement and grants the licensing rights is known as the

• franchiesee

• franchisor

the person who is granted the licence to run a franchise is known as the

• franchisee

• franchisor

Select all that are responsibilities of the franchisor:

• provides all marketing materials

• coordinates staffing needs

• issues and monitors policies and procedures

• provides funds to open franchise

Match the following

• -main objective of a business

  -requires achieving revenue greater than expenses

• Growth

• businesses need to assess spending regularly and be cautious of overspending. Eg considering wages

• Profitability

• ability to meet debt obligations in the long term, while maintaining high value of its assets

• Solvency

• relates to a business's ability to convert assets quickly to cash

• Efficiency

• • can occur through extending a product line or opening in a new location as profit is gained

• Liquidity

Select all that are responsibilities of a franchisee

• provides funds to open franchise

• seeks location for approval

• undertakes training

• provides all marketing materials

Select all that are examples of franchises

• Subway

• Boost Juice

• Southtown bakery (Theo's)

• McDonalds

How many stage are there in the employment cycle?

• 3

• 4

• 5

• 6