Page 53 - Cambridge IGCSE Business Studies

4: Types of business organisation

McDonald’s restaurants you will see that they all look very similar and sell
identical products.
■ The franchisee will still have to pay for any local promotions they decide to do.
ACTIVITY 4.3

Read the following franchise opportunities.

Advert
100% Natural Frozen Yogurt
This is a superb opportunity to sell healthy, natural frozen yogurt in your
own store. Your customers will love serving themselves with treats from
the delicious menu which features a natural frozen yogurt selection. It
also includes fruit smoothies with an ample choice of fresh fruit toppings
including strawberry, blueberry, kiwi, pineapple and mango.

Affordable House Cleaning
The housecleaning industry is life-friendly. Unlike restaurant or retail
industries, cleaning is done primarily within normal business hours.
Customers want to come home from work to a clean living space, which in

turn creates a manageable schedule for you.
Fabulous Mobile Accessories 51
Our products and services allow people to express themselves through
their most visible accessory – their phone. We offer a vast selection of
fashionable accessories, as well as providing specialty services like phone

repair at mall-based kiosks.

In pairs, discuss how successful you think each of these franchise businesses might be in your local area.
Choose the one which you think has the best chance of success – it does not have to be the same one as the person you
are working with. Write a short report identifying and explaining three reasons for your choice.

Joint ventures

Sometimes it benefits two or more businesses to work closely together on a business

KEY TERM opportunity. The main reasons for a joint venture are:
Joint ventures: two or more ■ It reduces the risk for each business and cuts costs.
businesses agree to work together

■ Each business brings different expertise to the joint venture.
on a project and set up a separate
■ Market and product knowledge can be shared to the benefit of the businesses in the
business for this purpose.
joint venture.
However, joint ventures have limitations, such as:
■ Any mistakes made may damage the reputation of all firms in the joint venture,
even if they were not the cause of the mistake.
■ The businesses may have different business cultures or styles of leadership, making

decision-making diff icult.