For this assignment I am going to compare the difference between Companies (H&M) and Franchises. (KFC)
Franchising is the 'hiring out' or licensing of the use of 'good ideas' to other companies. A franchise grants permission to sell a product and trade under a certain name in a particular area. If I have a good idea, I can sell you a licence to trade and carry out a business using my idea in your area. The person taking out the franchise puts down a sum of money as capital and is issued with equipment by the franchising company. The firm selling the franchise is called the franchisor and a person paying for the franchise is called the franchisee.
Where materials are an important part of the business (e.g. confectionary, pizza bases, and hair salons) the franchisee must buy an agreed percentage of supplies from the franchisor, who thus makes a profit on these supplies as well as ensuring the quality of the final product. The franchisor also takes a percentage of the sales of the business, without having to risk capital or become involved in the day-to-day management.
The franchisee benefits from trading under a well-known name and enjoys a local monopoly. Training is usually arranged by the franchisor. The franchisee is his or her own boss and takes most of the profits.
A company is owned by shareholders who appoint Directors to give direction to the business. The Chief Executive is the senior official within the company with responsibility for making major decisions. Specialist managers will be appointed to run the company on behalf of the Board.
A company is a legal body in its own right with an existence that is separate in law from its owners. The company will thus be sued and can sue in its own name.
Shareholders put funds into the company by buying shares. New shares are often sold in face values of £1 per share but this does not have to be the case.
Limited liability is a form of business protection for company shareholders (and some limited partners). For these individuals the maximums sum they can lose from a business venture which they have contributed going bust is the sum of money that they have invested in the company - this is the limit of their liability.
Every company must register with the Registrar of Companies, and must have an official address.
Private companies have Ltd after their name. They are typically smaller than public companies although some like Portakabin and Mars are very large. Shares in a private company can only be bought and sold with permission of the Board of Directors. Shareholders have limited liability.
The purpose of KFC is to offer either their brand, products, training to different stakeholder for a fee.
The stakeholders are
Suppliers/ Delivery drivers
Franchisor producing products. Kentucky Fried Chicken There are many stakeholders of KFC the…