Franchises
Franchises
A franchise agreement is an Agreement whereby someone with a good idea for a business (franchisor) sells the rights to use the business name nad sell a product or service (franchise) to others in a given territory
| Advantages | Disadvantages |
|---|---|
| Management assistance | Large startup cost |
| Marketing assistance | Shared profit |
| Personal ownership | Management regulations |
| Nationally recognized name | Coattail effects |
| Financial advice and assistance | Fraudulent |
| Lower failure rate |
Make sure you check the facts before you buy a franchise!
Case study: Pods
The nature of Entrepreneurship and Small Business
An entrepreneur is a person who risks his/her wealth, time, and effort for profit
Importance of small business to our economy
- Small firms represent 99.7% of all employer firms
- Small firms have generated 62% of net new jobs
- Small firms hire approximately 37% of high-tech workers (engineers, programmers)
- Small firms produce 16x patents per employee
- Small firms employ nearly half of all private-sector employees
- Small firms pay 42% of the total U.S. private payroll.
Job Creation
- 63% of new jobs annually created by small businesses
- 82.2% of all businesses employ under 500 people
- 66.8% of all businesses employ under 20 people
- Big/small company alliances also create jobs
Innovation
- Small firms produce over half of all innovations
- AI creating new opportunities for innovation
- Many of today’s largest businesses started as small firms that used innovation to acheive success
Industries that attract small businesses
- Retailing
- Wholesaling
- Services
- Manufacturing
- Technology
- Sharing/gig economy (etsy etc)
Successful traits of entrepreneurs
| Intuitive | Using intuition to derive what’s true without conscious reasoning |
| Productive | Being able to produce large amounts of something during a specific time period |
| Resourceful | Understand how to use resources |
| Charismatic | Having ability to inspire others |
| Innovative | Being able to come up with new ideas |
| Risk-takers | Having the ability to pursue risky, high-return endeavors despite possibility of failures |
| Persistent | Continuing in spite of obstacles |
| Friendly | Being able to have mutually beneficial interactions with people |