Z20BSS Foundations of Business
Some key terms
|External financing |This means obtaining sources of finance from outside the firm. This can be done in one of three ways: debt |
| |(such as loans), share capital, or grants from the Government. |
|External constraint |This is a factor outside the control of the business, which directly affects the business. The main types |
| |of external constraint include consumer tastes, competitors' actions, economic circumstances, legal |
| |constraints, social attitudes and pressure group activity. |
|Flotation |This is the term given to the initial launch of a company on to the stock market, by offering its shares to|
| |the general public. |
|Franchise |This is a business which is based upon the name, products, trademarks, logos, etc. of an existing, |
| |successful business. To obtain a franchise involves the payment of an initial fee plus the ongoing payment |
| |of a royalty based on sales revenue. |
|Franchisee |This is a person or company who has bought a franchise (i.e. the rights to use the name, products, |
| |trademarks, logos, etc. of another company (the franchisor). |
|Franchisor |This is the successful business which will sell the rights to its business name, products, etc. to suitable|
| |franchisees. This can be a far cheaper and easier way to expand the company than the...