OTE2601 ASSIGNMENT 02 DUE 2024..........
QUESTION 1
Every entrepreneur has certain expectations and goals when choosing a
business.
1.1What is a close corporation in business? Give one examples. (5)
Every entrepreneur has certain expectations and goals when choosing a
business.
1.1What is a close corporation in business? Give one examples. (5)
A close corporation, also known as a closely held corporation, is a type of
business organization that is owned and operated by a small group of
individuals, typically family members or a few close associates. This type of
corporation typically has a limited number of shareholders and is not
publicly traded on the stock market.
Example:
One example of a close corporation is the multinational food and beverage
company Mars, Incorporated, which is a privately held family-owned
business.
Reference:
- Gibson, J. (2019). Close Corporation. In Wank, R. D., & Szabo, C. (Eds.),
Encyclopedia of Business and Professional Ethics. Springer.
1.2 You are a Grade 7 teacher leading a discussion on the different kinds of
franchising.
1.2.1 What are the issues to consider when discussing about capital
requirement for a franchise (10).
When discussing the capital requirements for a franchise, it is important to
consider a few key issues:
, 1. Initial Franchise Fee: This is the upfront cost to purchase the rights to
operate a franchise. It is important to consider whether the initial franchise
fee is affordable and whether it provides value for the investment.
2. Ongoing Royalty Fees: Franchisees are often required to pay ongoing
royalty fees to the franchisor. These fees can vary and may be based on a
percentage of sales or a flat fee. It is important to understand the financial
impact of these ongoing fees on the franchise's profitability.
3. Start-Up Costs: In addition to the initial franchise fee, franchisees will
need to consider other start-up costs such as real estate, equipment,
inventory, and marketing. It is important to have a clear understanding of
all the start-up costs involved in opening a franchise.
4. Financing Options: Franchisees may need to secure financing to cover the
capital requirements of opening a franchise. It is important to explore
different financing options and understand the implications of taking on
debt to finance a franchise.
5. Return on Investment: Franchisees should carefully consider the potential
return on investment for a franchise opportunity. This involves analysing
the projected revenue and expenses to determine whether the franchise is a
financially viable opportunity.
6. Franchisor Support: Franchisees should also consider the level of support
provided by the franchisor, including training, marketing support, and on-
going guidance. This support can significantly impact the franchisee's ability
to meet the capital requirements and succeed in operating the franchise.
Reference:
- Rosenbaum, A. (2016). Franchising: An Introduction. CreateSpace
Independent Publishing Platform.
1.2.2 Do you agree with the assertion that businesses fail for a number of
reasons?
Substantiate on your answer by discussing the following;
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