1. Business Organizations
Other Organizations
Chapter 8 Section 4

2. Business Organizations
In Chapter 7 – we learned about franchises issued by government authorities.
These franchises give only one firm the right to sell its goods within a limited market, such as within a national park.

3. Business Organizations
In business, a franchise signals exclusive rights.
A Business franchise – a semi-independent business that pays fees to a parent company.
In return the business is granted the exclusive right to sell a certain product or service in a given area.

4. Business Organizations
Parent Companies are called franchisers.
Franchisers develop the products and the business system.
They work with the local franchise owners to help them produce and sell their products.
Most people think of the fast-food industry.

5. Business Organizations
Advantages of Franchises:
1. Management, training, and support
Franchisers help inexperienced owners gain the experience they need to be successful.
2. Standardized quality
Most parent companies require franchise owners to follow certain rules and processes to guarantee product quality.

6. Business Organizations
Advantages of Franchises:
3. National Advertising Programs
4. Financial Assistance
Some franchises provide assistance to help owners start up their business.
5. Centralized Buying Power
Franchisers buy materials in bulk for all of their locations. The savings are passed onto the owners.

7. Business Organizations
Disadvantages of Franchises
High franchise fees and royalties
Strict operating standards
Owners must follow all of the rules laid out in the franchising agreement for employee dress code, procedures, and etc.
Purchasing restrictions
Owners must often buy their supplies from the parent company.
Limited Product Line
Can only offer approved products in their stores.

8. Business Organizations
Cooperatives – a business organization owned and operated by a group of individuals for their mutual benefits.

9. Business Organizations
Types:
Consumer Cooperatives - retail outlet owned and operated by consumers.
They buy in bulk amounts of goods and services on behalf of their members – able to offer it to their members at prices lower than those charged by regular businesses.
Example – Sam’s Club {even though they are not a consumer cooperative}

10. Business Organizations

11. Business Organizations
Types:
Service Cooperative – a cooperative that provides service rather than a good.
Example – Credit Union

12. Business Organizations
Types:
Producer Cooperative – agricultural marketing cooperative that helps members sell their products.
Example: Farmer’s Co-ops

13. Business Organizations
Nonprofit Organizations – institution that functions much like a business, but does not operate for the purpose of generating profit.
Example: Red Cross, Museums, hospitals, churches, adoption agencies, YMCA, and etc.
These groups are exempt from paying taxes.
Some of them operate with partial government support.

14. Business Organizations
Professional Organizations – nonprofit organization that works to improve the image, working conditions, and skill levels of people in those particular occupations.
Example: American Bar Association, American Medical Association, American Veterinary Medical Association, National Education Association, and etc.

15. Business Organizations
Professional Organizations keep their members up-to-date on industry trends, help them follow codes that have been set, and other things that come up throughout the year.

16. Business Organizations
Business Association – nonprofit organization that promotes collective business interests for a city, state, or other geographical area.
Example: Better Business Bureau {BBB} or Chamber of Commerce

17. Business Organizations
Trade Associations – nonprofit organization that promotes the interests of a particular industry.
Example: American Marketing Association – aims to improve marketers’ and marketing firms’ images.

18. Business Organizations
Labor Union – an organization of workers formed to represent its members’ interests in various employment matters.
Participate in collective bargaining for their members – work out the contracts that labor gets for their job/occupation.
Example: American Auto Workers Union, Pipefitters Union, Carpenters Union, and etc.