Question

The "Art" of Choosing the Right Form of Business Many artists and art lovers embrace the idea of the "starving artist," such as the early career artist who hasn't yet sold much of her art or whose art hasn't yet been "discovered," the artist who sacrifices lifestyle, living in a cheap apartment in a poor neighborhood, scraping by with barely enough to eat, pouring every dollar at their disposal into his art, or the artist who makes do by working other jobs, such as a waiter or waitress, to pay the rent so he can work on his art in his free time. As an artist and businessperson, however, you'd rather not be a "starving artist." Of course, it takes time to master your art, display your work, and build a following, but is it necessary if you're successful as an artist to also be a bad businessperson? The challenge with your art, bronze sculptures, however, is what comes first, the chicken or the egg, in other words, success as an artist or financial success? With the cost of materials, foundry time to pour and shape your creations, and the help of technicians or specialty artists, it can cost thousands of dollars, sometimes tens of thousands, per piece. But without financial success, you lack the capital needed to create your work. And, without your work to sell to art lovers, you don't have the capital you need to create your work. Yes, indeed, chicken or egg? Since you're a better artist than businessperson, you're working with a lawyer and accountant who have advised you to establish a company and choose a business form that helps you succeed as an artist. They've given you some preliminary information on sole nronrietorshins. C corporations. S corporations. partnerships.

Answer 1

1.The primary reason most entrepreneurs turn to franchising is that it allows them to expand without the risk of debt or the cost of equity. First, since the franchisee provides all the capital required to open and operate a unit, it allows companies to grow using the resources of others.

Long-term commitment. Since the franchisee is invested, she will find it difficult to walk away from her business.

Better-quality management. As a long-term “manager,” your franchi­see will continue to learn about the business and is more likely to gain institu­tional knowledge of your business that will make him a better oper­ator as he spends years, maybe decades, of his life in the business.

Improved operational quality. While there are no specific studies that measure this variable, franchise operators typically take the pride of ownership very seriously. They will keep their locations cleaner and train their employees better because they own, not just manage, the business.

Innovation. Because they have a stake in the success of their business, franchisees are always looking for opportunities to improve their business -- a trait most managers dont share.

2.It is traditionally the initial payment that the franchise makes to the franchisor when they sign their franchise agreement and become a franchise. This fee can be any amount above $500 (it must be above $500 to trigger the “payment” element of the FTC Rule) and is generally in the range of $10,000 to $50,000