1. Review: In your workbook… Identify FOUR legal structures that businesses might consider Identify FOUR legal structures that businesses might consider For each, note down: For each, note down: The number of owners The number of owners ONE advantage ONE advantage ONE disadvantage ONE disadvantage

2. StructureOwnersAdvantageDisadvantage Sole trader 1 Easy to establish Limited skills, experience, capital Partnership2-20 Shared responsibility and work load Unlimited liability Private Company (Pty Ltd) 1-50 Limited liability Invitation only – limited owners Public Company 1+ Separate legal entity Access more equity finance Complex process to establish (prospectus, mgmt structure) Cooperative7+ Limited liability; members share profits Establishment costs; cost of meetings Trust2+ Tax advantages Cost of establishment & mgmt high; complex legalities

3. Franchises Another popular legal structure for business entities

4. What is a franchise? A licence to operate an individually owned business as if it were part of a chain of outlets or stores A licence to operate an individually owned business as if it were part of a chain of outlets or stores Identify 10 franchises (write them down!) Identify 10 franchises (write them down!)

5. Identify some franchises… Try to think outside the food/beverage box!

6. Top 500 Franchises According to Entrepreneur.com According to Entrepreneur.com Who do you think made it to the Top 10 in USA? Who do you think made it to the Top 10 in USA? http://www.entrepreneur.com/slideshow/1990 84.html http://www.entrepreneur.com/slideshow/1990 84.html http://www.entrepreneur.com/slideshow/1990 84.html http://www.entrepreneur.com/slideshow/1990 84.html

7. SUBWAY Why do you think Subway are voted #1 franchise opportunity in USA (according to entrepreneur.com)? Why do you think Subway are voted #1 franchise opportunity in USA (according to entrepreneur.com)? Subway franchise video Subway franchise video http://www.youtube.com/watch?v=vaTHDa5jq DI http://www.youtube.com/watch?v=vaTHDa5jq DI http://www.youtube.com/watch?v=vaTHDa5jq DI http://www.youtube.com/watch?v=vaTHDa5jq DI

8. Who brings what to the table? Franchisor: Franchisor: Advertised business name Advertised business name Marketing Marketing A successful business concept A successful business concept Comprehensive guides for mgmt and way of doing business Comprehensive guides for mgmt and way of doing business Franchisee: Franchisee: Start up capital Labour and day-to-day running of the business Agrees to abide by company policies

9. Why do it? Why pick ‘franchise’? Higher success rate Higher success rate Guaranteed customer base Guaranteed customer base Successful business model – lower risk Successful business model – lower risk Moderate start-up capital requirement Moderate start-up capital requirement Good for those with limited business experience Good for those with limited business experience

10. What about foodcube? http://www.youtube.com/watch?v=d2vYilk Elqk http://www.youtube.com/watch?v=d2vYilk Elqk http://www.youtube.com/watch?v=d2vYilk Elqk http://www.youtube.com/watch?v=d2vYilk Elqk Would you invest in such a franchise opportunity? Would you invest in such a franchise opportunity? $100K-$250K $100K-$250K