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Mr. Owais has just earned a diploma in Hotel Management. He has a plan to open a small fast food outlet but he is not sure whether to run it as an independent “sole proprietor” or franchisee of an existing known brand.  He has come to know through some source that you are currently enrolled in MGT211-Introduction to Business course. Therefore, he is seeking advice from you that which one is the most suitable/appropriate option for him i.e. sole-proprietorship or franchising?  You are also required to explain him with reasons that why you have advised him a particular option.

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(SOLUTION)!
    From my point of view he should run as "partnership". Because partnership means all the partners will work and invest thiere capital and that is how Mr. Owais's hotel can get good capital to run his hotel.
  If all the partners want to work and active in his business then this should be more benifit for mr. owais's business.
So i reccomend to mr. owais he should run as partner ship. 

dear question is that what should we recommend to mr owais sole proprietorship or franchise business not partnership

kindly discuss  here..share ur point of view regarding this GDB....

جناب اویس صرف ہوٹل مینجمنٹ میں ڈپلوما حاصل کئے ہیں. انہوں نے ایک چھوٹے سے فاسٹ فوڈ کی دکان کھولنے کے لئے ایک منصوبہ ہے لیکن وہ اس بات کا یقین ہے کہ یہ ایک آزاد "واحد مالک" یا ایک موجودہ برانڈ نام سے جانا جاتا کی فرینچااسی کے طور پر چلانے کے لئے نہیں ہے. انہوں نے کچھ ذریعہ ہے کہ آپ فی الحال کاروبار کورس MGT211 کے تعارف میں داخل ہو کے ذریعے پتہ چل گیا ہے. لہذا، وہ آپ سے مشورہ کی تلاش میں ہے جو ایک نے انہیں یعنی ملکیت واحد یا franchising کے لئے سب سے زیادہ موزوں / مناسب اختیار ہے؟ آپ یہ بھی کہ کیوں آپ نے اس کو مشورہ دیا کہ ایک خاص طور پر اختیار ہے وجوہات کے ساتھ اس کو سمجھانے کی ضرورت ہے.

First of All i ask him About the Financial Sources

If he is having sufficient Financial Sources than I ll suggest to adopt Sole propritorship


Because Sole Propritorship Offers such Advantages than no other business Can offer:
1-it is easy to establish and easy to dissolve
2-Managment Flexibilty For owner
3- Owner is all in all for his Business
4-Owner has right to retain all profits after payment of personal taxes
5-Retention of all profits and responsibility of all losses give sole propritorship incentive to maximize efficiency in operations
But if he has limited financial resources than it ll be dificult for him to maintain the business because
Sole proprietorships do not pay franchise taxes, and earnings and losses are reported on your personal income tax return.
Unfortunately, this format offers no liability protection whatsoever,
in this case i ll suggest him that

good insurance coverage is vital to protect your personal assets from business-related claims

But in case he has no sufficient Financial Sources
it ll be better to adopt Franchisee Trend of Business because
1-primary benefit is risk minimization
2-Franchisers sell a defined, proven business format or method of operation, offering a product or service that has sold successfully
3-Franchisees can often buy lower-cost goods and supplies
4- group purchasing power of all the franchises.
5-potential to grow as its business and name recognition grow.
6- management assistance, including accounting procedures, personnel and facility management.
7- The most difficult part of a new business is its start-up, franisers helps to new franchisees in gaine xperience
8-One of the biggest benefits to franchising is marketing.

First of All i ask him About the Financial Sources 

If he is having sufficient Financial Sources than I ll suggest to adopt Sole propritorship


Because Sole Propritorship Offers such Advantages than no other business Can offer:
1-it is easy to establish and easy to dissolve
2-Managment Flexibilty For owner 
3- Owner is all in all for his Business 
4-Owner has right to retain all profits after payment of personal taxes
5-Retention of all profits and responsibility of all losses give sole propritorship incentive to maximize efficiency in operations
But if he has limited financial resources than it ll be dificult for him to maintain the business because 
Sole proprietorships do not pay franchise taxes, and earnings and losses are reported on your personal incometax return.
Unfortunately, this format offers no liability protection whatsoever,
in this case i ll suggest him that

good insurance coverage is vital to protect your personal assets from business-related claims

But in case he has no sufficient Financial Sources 
it ll be better to adopt Franchisee Trend of Business because
1-primary benefit is risk minimization
2-Franchisers sell a defined, proven business format or method of operation, offering a product or service that has sold successfully
3-Franchisees can often buy lower-cost goods and supplies
4- group purchasing power of all the franchises.
5-potential to grow as its business and name recognition grow.
6- management assistance, including accounting procedures, personnel and facility management.
7- The most difficult part of a new business is its start-up, franisers helps to new franchisees in gaine xperience
8-One of the biggest benefits to franchising is marketing.

See the attached file for MGT211 GDB Solution fall 2011

 

Attachments:

Tariq bhai! question yeh pocha giya hay k franchisee laine hay ya entrepreneurship tu ap nay tu partnership pe he bat khatm kar de. with sorry.

I will suggest him franchisee of an existing known brand because1) Lower Failure Rate - When you buy a franchise, you are buying an established concept that has been successful.2) Help with Start Up and Beyond - You get a lot of help starting your business and running it afterwards.3) Buying Power - Your franchise will benefit from the collective buying power of the parent company as the franchisor can afford to buy in bulk and pass the savings along to franchisees.4) Star Power – Many well-known franchises have national brand-name recognition. Buying a franchise can be like buying a business with built-in customers.





I would suggest him sole proprietorship because1. A sole proprietor has complete control and decision-making power over the business.2. Sale or transfer can take place at the discretion of the sole proprietor.3. No corporate tax payments4. Minimal legal costs to forming a sole proprietorship


Question: Mr. Owais has just earned a diploma in Hotel Management. He has a plan to open a small fast food outlet but he is not sure whether to run it as an independent “sole proprietor” or franchisee of an existing known brand. He has come to know through some source that you are currently enrolled in MGT211-Introduction to Business course. Therefore, he is seeking advice from you that which one is the most suitable/appropriate option for him i.e. sole-proprietorship or franchising? You are also required to explain him with reasons that why you have advised him a particular option???


Solution

Answer: Mr Owais should start his own business "sole proprietor"
Reason:
1=He had some Diploma in hotel management that help him to run small fast food shop 
2=There is no legal restrictions for sole trader to set up business. So he has freedom to to manage the prices and production method ,method of paking etc.
3=He can easily utilize his profit no body shear with him .
4=The starting of business is very easy and to start it not required much capital.(huge amount ) 

i thinks awais must join the partneship the reason is that he has not experience about hotel management therefor its best for the partnership and its suitable for him .in this way he can gets the experiences of hotle management

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