Sonic Franchise Essay
In 1954, Troy Smith established Sonic as a sole proprietorship under another name and latter went on to start up a partnership with Charlie Patton. There are four types of business ownerships, sole proprietorship, general partnership, franchise, and corporation. What are the differences between the four types of business ownerships? If Sonic had remained a sole proprietorship, would it have grown as large as it is today? What advantages and disadvantages did Sonic go through in each form of business ownership? What makes one eatery franchise more successful than other eatery franchises in the fast food industry? Sole ownership is when no more than one person owns and operates the company they have completed said regarding the business (Nickels 2013). In a sole proprietorship should the company be unsuccessful, the owner is fully responsible and suffers full loss. In a general partnership, both owners are accountable for the running and success of the business. Should the company not succeed, both are responsible for the bills/operating expense of the company. When it comes to franchising, several different people own franchised businesses but have to abide by the rules set out by the proprietor/creator of the company. If one of the franchises should fail, the company may lose a percentage of money they have been receiving from that store, but only a portion from that particular franchise. The person who franchised, or bought into the company loses what they put into the company to begin their franchised business. Corporations are a whole other story, if they fail, the investors and everyone else involved stand to lose a great deal of money not only from their stocks because they will be worthless, but because the owner/s of the company are not held liable for any of the businesses loses. If Sonic had remained a sole proprietorship, it would not have become as large as it is at this...