Franchise Cooperative and Multinational

Notes Prepared By Mrs Ranjeeta Awotar - Grade 9 BEE - Unit 1 on Business Organisations 02/18/2023
BUSINESS
ORGANIZATION
FRANCHISE; COOPERATIVES; MULTINATIONALS
2 1.4 FRANCHISE
• A Franchise is an enterprise that

has a license from a Franchisor to
sell its products or services
3 WHAT IS A FRANCHISE?
4 FRANCHISOR V/S FRANCHISEE

EXAMPLE OF FRANCHISE: MCDONALD’S
• For example, many

McDonald’s restaurants are franchises,
meaning an owner (or group of
owners, in some cases) pays
McDonald’s to use their brand name,
menus, logos, and other business
assets.
• They run their location, pay
McDonald’s to use the name, and keep
the remaining profits.
6 EXAMPLES OF FRANCHISE
In the Clothing and Fashion In the Food Retailing Business

Buisness
1.4.1 HOW TO SET UP A FRANCHISE
In a franchise business, a franchise owner

pays a fee to essentially “rent” a brand
name.
8 FRANCHISE AGREEMENT
• There are two main parties involved in a

Franchise Agreement – The Franchisor (the
business owner) and The Franchisee (who
acquires a license from the business owner).
• A typical Franchise Agreement will include: a
franchise disclosure document; territory limits;
fees & purchases; timeline & renewal;
advertising & marketing; sourcing & design;
confidential data.
FEATURES
9
OF A FRANCHISE
10 OWNERSHIP AND CONTROL

ADVANTAGE AND DISADVANTAGE OF
FRANCHISE
11
Advantages Disadvantages
Strong Reputation- Fewer Huge Investment
chances of new business The franchise license fee can
failure as an established be expensive
brand
Support and Training Control by Franchisor
Advise; management Strict rules on pricing;
support and training layout to follow (it decreases
offered owner’s control over
business
Existing product Profits to Franchisor

Most supplies purchased Part of the Profits to be paid
directly from franchisor to the franchisor
12 1.3 COOPERATIVES
13 DEFINITION OF COOPERATIVE
• A Cooperative is a business
organization which is owned and
run jointly by its members, who
share the profits or benefits
14 FEATURES OF COOPERATIVES
FEATURES OF A COOPERATIVE
Registration It is registered at the Cooperatives
Division
Ownership Owners are known as members.
Shares are issued to members to raise
capital
Control Each member has one voting right to
participate in the decision making
Risk Members have limited Liability
Profit The gains are termed as surplus.
Members share it among themselves as
dividend.
15 1.3.1 HOW TO SET UP A COOPERATIVE
Application to
Certificate of
the Cooperatives Registration
Registration
Division
ADVANTAGES AND DISADVANTAGES OF A
COOPERATIVE
16
Advantages of a cooperative
Employment Members create their own jobs and provide
employment to others
Ownership Members share ideas and help in the
and Control management of the cooperative
Profits The gains (surplus) are shared among
members as dividends
Government Grants, Subsidies, loans and other financial
Support and non financial assistance given as support
Disadvantages of a cooperative
Consultation Slow decision making (all members need to
be consulted
Low Profits Prices are usually low (low profit)
17 MULTINATIONALS
Multinational Company (MNC) is an enterprise that has production or service facilities outside
the country in which it is based.
18 FEATURES OF MULTINATIONAL COMPANY
Headquarter
(Parent Company in
USA for example)
Country A Country B Country C Country D
Headquarter is the Country of Origin

MNCs manufacture products with same features,
logo or product names in different parts of the world.
ADVANTAGES AND DISADVANTAGES OF MNC
19
20 1.5 SELECTING THE RIGHT BUSINESS

ORGANIZATION FOR MY ENTERPRISE
Factors to Consider Ownership Decisions are influenced by:
and Control
Who will Own and Control? Some enjoy to take risk others unwilling
to do so
Will I have Control (Will it be
shared)? Continuity Risks
Some want to raise more capital to grow
What are the Risk owner is their enterprise
willing to take?
What are the formalities Some discouraged due to complicated

involved in setting up? Registration
and Expansion
registration process and expensive fees
Procedures
Who will be responsible when
I am absent?

Franchise Cooperative and Multinational

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Notes Prepared By Mrs Ranjeeta Awotar - Grade 9 BEE - Unit 1 on Business Organisations 02/18/2023

• A Franchise is an enterprise that

4 FRANCHISOR V/S FRANCHISEE

• For example, many

In the Clothing and Fashion In the Food Retailing Business

In a franchise business, a franchise owner

• There are two main parties involved in a

10 OWNERSHIP AND CONTROL

Existing product Profits to Franchisor

15 1.3.1 HOW TO SET UP A COOPERATIVE

18 FEATURES OF MULTINATIONAL COMPANY

Country A Country B Country C Country D

Headquarter is the Country of Origin

20 1.5 SELECTING THE RIGHT BUSINESS

What are the formalities Some discouraged due to complicated

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