Question

Like many entrepreneurs, troy smith started sonic as a sole proprietorship, then took on a partner, and eventually offered franchises. what advantages did he enjoy at each stage of sonic's development? what disadvantages did he face

Answer 1

First Stage: Sole Proprietorship

In the early stage of development, Troy Smith started Sonic as sole proprietorship. The advantage in this stage was that he was making all business decisions to himself. While the disadvantage was that he was not having help with things when needed thus causing his first ventures to fail

 

Second stage: Partnership

The advantage in this scenario was that Troy Smith is now having help with things like and he can focus his attention in improving the business operations while his partner focus primarily on sales. The greatest disadvantage now is that he has to share the profits of the business.  

 

Third stage: Franchise

The business can now continue to grow while maintaining all the same qualities the company was started with. The disadvantage would now be Troy Smith would have limited control over the success of that particular franchise.