Disadvantages Of Becoming A Sole Trader

Introduction
A sole trader, also known as a proprietorship, is a type of business which is owned and run by an individual or one legal person

Franchise

Advantages & Disadvantages of Becoming a Sole Trader

Advantages of Being a Sole Trader
A sole trader is a person who is the exclusive owner of a business, entitled to keep all profits after tax has been paid but liable for all losses. As stated, a person being the “exclusive owner” means they have full control of their business. No one can interfere with the decisions and the actions Johnny makes to run his business. Allowing his plans to be acted on faster and more smoothly. Second, any profit the Johnny earns, as a sole trader he has the right to retain it all. Profit is a financial gain

First, being a franchisee of a respected business leads to success. If Johnny were to become a franchise of Subway (popular business), the worries of going out of sale are long gone. All of the advertising and the making of your business be known around the world is already done for you. Second, help to start off the franchise is given to you. Johnny would be given training programmes and first-hand support. All of the finance needed to gather all of the equipment, vehicles, organisation of marketing, and advertising is given to you. Third, the location where the franchise is set up is chosen well by the franchisor. A place where the business can gain the most it can, that would be where it is most available for the consumers. And last, banks allow your chance of finance to increase. If not enough money is given to you by the franchisor, banks are more than happy to give you loans. Making the business more known will ensure it security. So the greater the business, the more tax the business has to pay. The pros of becoming a franchise are more suitable to help Johnny in the situation he is in at the

First, the franchisor charges you a monthly fee from the total profit you make. They will take out parts of your takings as a royalty fee. And to start off the franchise using the brand’s name needs a certain amount of money to be paid. In Johnny’s case he will need to pay US$12,500 to use the brands name (Subway). Second, as a franchisee you have no control over the way you run your business. You will have to follow guidelines given by the franchisor. If these aren’t followed, the agreement between the franchisee and the company policies may be terminated. Third, decisions made by the franchisor could make the firm fail. Eventhough you might be making great progress in your sector, you could take the fall for the wrongs of others. If one franchisee fails to follow the guidelines or brings down the business. It can give bad impressions of the brand’s name. So Johnny could result in a bad situation in the cause of others. And last, the work set for you has to be completed. If it isn’t, the franchisor could shut down your franchise according to what is stated in the agreement. Either way, Subway has so many franchises around the world that if one fails. The brand’s name won’t be affected as