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2 years ago

What are the primary advantages to owning a franchise?

Business

2 answers:

Volgvan2 years ago

6 0

Answer:

Explanation:

Owning a franchise has the following main advantages:

1) A franchise owner gets valuable help throughout the lifespan of the business. Upon acquiring a franchise, the business owner receives a continuous training and assistance necessary for marketing and management.

2) Owning a franchise comes with a low rate of failure. A franchise comes with an established business concept that is already successful in the market which assures the owner of better chances of success compared to starting up an independent business.

zhenek [66]2 years ago

5 0

Answer:

There are several benefits and advantage of owning a franchise, but the most important one is that you are your own boss. If you are a entrepreneur and don't wish to work for someone else anymore, then a franchise is a good choice.

Other benefits include:

You don't need experience in that specific industry, when you purchase a franchise you acquire the franchiser's know-how.
Franchises have a large customer base and brand recognition. Imagine you are Mexico City and you have to choose between eating at Burger King or "El Rey del Burger".
Having a large customer base and brand recognition also comes with a lower business risk. Franchises are safer investments than new companies. Besides you have all the know-how and experience of hundreds or thousands of similar businesses.
Many times you can lower your costs because franchises have a large collective buying power. Imagine how much it would cost a local restaurant to purchase the same toys McDonald's gives in its happy meals.

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Erin Shelton, Inc., wants to earn a target profit of $960,000 this year. The company’s fixed costs are expected to be $1,320,000

kipiarov [429]

Answer:

1. Break-even sales = $2,200,000

2. Net Income = $0

3. Sales = $3,800,000

4. See explanation section

5. Margin of safety = $1,600,000

Margin of safety (%) = 42.11%

Explanation:

Requirement 1.

We know,

Break-even sales = Fixed expense ÷ Contribution Margin Ratio

Given,

Expected Fixed expense = $1,320,000

Contribution Margin Ratio = Contribution Margin ÷ Sales Revenue

As we do not have contribution margin and Sales Revenue, we have to use variable costs that is expected to be 40% of sales. Therefore,

Contribution Margin Ratio = Sales (%) - variable costs (%) = 100% - 40% = 60%

Therefore, Break-even sales = $1,320,000 ÷ 60%

Break-even sales = $1,320,000 ÷ 60%

Therefore, Break-even sales = $2,200,000

Requirement 2.

Erin Shelton, Inc.

Contribution Margin Income Statement format

For the year ended, December 31, Current year

Sales Revenue $2,200,000 (Requirement 1)

Less: Variable expense (40% of sales) 880,000

Contribution Margin $1,320,000

Less: Fixed Expense 1,320,000

Net operating Income 0

In break-even sales, total fixed expense = total contribution margin, therefore, no income or loss.

Requirement 3.

We know,

This year, To attain profit, sales = (Fixed expense + Target Profit) ÷ Contribution Margin Ratio

Given,

Expected Fixed expense = $1,320,000

Target Profit = $960,000

Contribution Margin Ratio = Contribution Margin ÷ Sales Revenue

As we do not have contribution margin and Sales Revenue, we have to use variable costs that is expected to be 40% of sales. Therefore,

Contribution Margin Ratio = Sales (%) - variable costs (%) = 100% - 40% = 60%

Therefore, To attain profit, sales = ($1,320,000 + $960,000) ÷ 60%

To attain profit, sales = $2,280,000 ÷ 60%

Therefore, To attain profit, sales = $3,800,000

Requirement 4.

Using To attain profit, sales = $3,800,000 (From Requirement 3) to find the net operating income

Erin Shelton, Inc.

Contribution Margin Income Statement format

For the year ended, December 31, Current year

Sales Revenue $3,800,000 (Requirement 3)

Less: Variable expense (40% of sales) 1520,000

Contribution Margin $2,280,000

Less: Fixed Expense 1,320,000

Net operating Income $960,000

Requirement 5.

We know,

Margin of safety = (Current sales - Break-even sales)

From Requirement 1, we get, Break-even sales = $2,200,000

From Requirement 3, we get, Current sales = $3,800,000

Margin of safety = $3,800,000 - $2,200,000

Therefore, Margin of safety = $1,600,000

Margin of safety as percentage = [(Current sales - Break-even sales) ÷ Current sales] × 100

Margin of safety = ($1,600,000 ÷ $3,800,000) × 100

or, Margin of safety = 0.42105 × 100

Margin of safety = 42.11%

8 0

3 years ago

Dee wants to give Fleesum's employees more freedom to schedule when they begin and end their workdays. Her plan still requires e

77julia77 [94]

Answer:

B. flextime plan.

Explanation:

A flextime plan is a schedule that allows employees to decide their start and finish hour which is what it is said in the case as Dee give her employees the option to choose when to begin and end their days. Also, this plan requires employees to always be at work at certain hours as it is indicated. This means that it is mandatory for employees to be at their job in certain times but out of that they can choose their schedule.

8 0

3 years ago

A real estate broker is employed by a buyer, as an agent. When the broker finds a property the buyer might be interested in buyi

Viktor [21]

Answer:

Disclosure.

Explanation:

In this scenario, a real estate broker is employed by a buyer, as an agent. When the broker finds a property the buyer might be interested in buying, the broker is careful to find out as much as possible about the property's owners and why the property is on the market. The broker's efforts to keep the buyer informed of all facts that could affect a transaction is the duty of disclosure. A disclosure is a legally binding agreement between the buyer and seller of a property, wherein the seller highlights all the information or details they know about the property for the purpose of enlightening and informing the buyer. It contains informations such as legal encumbrance, structural flaw, size of property etc.

6 0

3 years ago

You would like to use the periodic review model to compute the desired order quantity for a company. You know that vendor lead t

skad [1K]

Answer:

a. 40

Explanation:

The computation of the standard deviation of the demand is shown below:

= 8 × √(5+20)

= 8 × √25

= 8 × 5

= 40

Hence, the standard deviation of the demand is 40

Therefore the first option is correct and the same is to be considered

7 0

2 years ago

Lana applies for a firefighterâ€™s job with Metro City, which responds with a letter setting an appointment for a medical exam.

solmaris [256]

Answer: a unilateral contract that Lana can accept by passing the exam.

Explanation:

A unilateral contract is a form of contract agreement whereby the offeror promises to do a particular thing or pay a certain amount after a specified action has occured.

In this scenario, Metro City would only give an employment offer to Lana if she passes her exam. This is a unilateral contract that Lana can accept by passing the exam.

7 0

3 years ago