Admi 202 Study Guide Final

5257 Words Jun 10th, 2013 22 Pages
Chapter 4 pg 121-129
Franchising agreement: stipulates (specifies) the duties and responsibilities of the franchisee and the franchiser. Benefits of Franchising For the Franchiser ■ The franchiser can attain rapid growth for the chain by sign- ing up many franchisees in many different locations. ■ Franchisees share in the cost of advertising. ■ The franchiser benefits from the investment money provided by franchisees. ■ Advertising money is spent more efficiently (the franchiser teams up with local franchisees to advertise only in the local area). ■ The franchiser benefits because franchisees are motivated to work hard for
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Income trust: the income trust structure involves corporations distributing all or most of their earnings to investors and thereby reduces the corporation’s income tax liability.
Limited liability: the liability of investors is limited to their personal investments in the corporation.
Stock: A share of ownership in a corporation.
Double taxation: A corporation must pay income taxes on its profits, and then shareholders must also pay personal taxes on the dividends they receive from the corporation.
Dividends: The amount of money, normally a portion of the profits, which is distributed to the shareholders.
Co-operative: An incorporated form of business that is organized, owned, and democratically controlled by the people who use its products and services, and whose earnings are distributed on the basis of use of the co-operative rather than level of investment. Types of Co-operatives There are hundreds of different co-operatives, but they generally function in one of six main areas of business: ■Consumer co-operatives. These organizations sell goods to both members and the general public (e.g., co-op gasoline stations, agricultural implement dealers). ■Financial co-operatives. These organizations operate much like banks, accepting deposits from members, giving loans, and providing chequing services (e.g., credit unions). ■

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