SkillBuilder discussion Evaluating, concluding and decision-making 1. McDonald’s has almost 40 000 franchises worldwide. Where do you think most of these are? 2. Why do you think McDonald’s franchises are so successful? 3. Study the images in FIGURE6 – why do these McDonald’s look different from each other?
FIGURE6 McDonald’s has the highest number of franchises worldwide, almost 40 000.
TABLE4 Advantages and disadvantages of a corporation Advantages
Disadvantages
Established brand recognition
Limited control over business decisions
Training and support from franchisor Lower risk of business failure Marketing and advertising support
Ongoing royalty fees
Restrictions on creativity and innovation Dependence on franchisor’s success
16.3.4 Choosing the best form of ownership A business owner can choose different types of ownership when starting a business. They need to think about what they prefer and the pros and cons of each type. For example, someone who likes to work alone and wants an easy set-up might pick a sole proprietorship. A person wanting to sell products across Australia or overseas might choose a company structure. As a business grows and its goals change, the owner may need to rethink the best type of ownership for their business. 16.3 SkillBuilder activity EVALUATING, CONCLUDING AND DECISION-MAKING, COMMUNICATING Work with a partner to complete the following: 1. Complete some of your own research about the different types of businesses. 2. Using this information, summarise three advantages and three disadvantages of each form of business ownership using a table such as the one provided.
Business ownership type
Advantage
Disadvantage
3. Discuss an idea for a business with your partner. Write a paragraph on what you might sell, who you might sell to, and where you might be located. 4. Choose an appropriate type of ownership for the business. Write a paragraph to justify why this type of ownership will suit you best. 5. Present your idea and your chosen business ownership to your class.
TOPIC16 How markets work 557
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