Advantages and Disadvantages of Becoming a Franchisee

This article discusses the advantages and disadvantages of becoming a franchisee in the business world. It covers topics such as the benefits of using an established brand, the existing market for franchised businesses, and the limitations on making modifications. It also mentions the lower profit margin due to fees and royalties. The article concludes by recommending franchising as a good option for new business owners and highlights the pre-established market and goodwill associated with franchised brands.

BUSINESS AND
CORPORATE LAW

Table of Contents
MAIN BODY...................................................................................................................................3
Week 6........................................................................................................................................3
Week 7........................................................................................................................................4
WEEK 8...........................................................................................................................................5
Advantages and disadvantages of becoming a franchisee..........................................................5
Week 9........................................................................................................................................6
WEEK 10.........................................................................................................................................6
Members and shareholder...........................................................................................................6
REFERENCES................................................................................................................................8

MAIN BODY
Week 6
a.) Yes, Egeeay Supermarket tends to owe a duty of care to Barbara. The Egeeay Supermarket
legally owns owns duty of care towards every customers irrespective of the fact if they are the
regular or irregular customers. The key principle of the duty of care is that, there is an obligation
of the person to avoid omission or acts which reasonably foreseen to harm and injure the other
people. The duty of care is the obligation who tends to act in the best interest of the others and
individual (Bianchi, 2018). This way it helps in ensuring that, the person must not in a specific
way which leads to harm. In this specific case scenario, Barbara slipped on grapes within pet
food section within aisle 3. This slip has resulted in fall and breaking of the ankle of the
individual person. Hence, Egeeay Supermarket tends to provide duty of care which helps in the
reasonable protection to the customers. The store tends to have the duty of care which helps in
ensuring well being and safety to the customers. It is the duty of the supermarket to keep the
floor clean and also adhere with the standards in order to provide reasonable care to the person.
The duty of care is useful in ensuring that, the person do not tend to endure any unseasonable
injury.
b.) Yes, the Egeeay Supermarket has breached the duty of care. The store manager has the policy
to check the floor of the store within fruit section every 15 minutes. This is because there are
number of spillages every week within the green grocery section of the store. The duty of care of
the person has been breached when the person has been injured because of certain action of
another individual person. When there seems to be a foreseeable reason of action tends to lead to
a risk of harm to the injured individual. There is a significant breach of duty of care on the part
of Egeeay Supermarket because the Barbara has sustained injury and has lead to the breaking of
the ankle of the individual person. The duty of care has been breached because the Barbara has
slipped on grapes which has lead to the broken ankle of the Barbara.
C.) No, the answer would not have been different in case the Barbara has slipped on some grapes
within the fruit area of the Egeeay Supermarket store (Peterson, 2017). The duty of care must be
significantly applied within the store in order to protect the well -being and interest of the
customers. Duty of care is one of the key legal responsibility of the organization towards the
customers which helps in avoiding omission and behaviour and be reasonably foreseen in order
to cause injury or harm to the other person. It is the legal duty of the Egeeay Supermarket to

check the floor of the store within fruit section every 15 minutes. Whether the incident happened
at the pet food section or fruit section it is the legal responsibility of the Egeeay Supermarket to
comply with the duty of care in order to protect the well-being of the customers.
Week 7
Australian consumer law is useful in effectively providing the guarantee to the customers
with the specific set of goods the individual buy in order to provide quality goods and services
which are acceptable to the customers. It is useful in setting out the rights of the customers which
is referred to as the consumer guarantee. These rights mainly includes the right to replacement,
repair, refund and compensation against losses and damages of the product. Within the specific
case scenario, Brown has bought a pair of woollen under- pants from the Underwear Galore
company in Adelaide. The Brown has contracted dermatitis because the underpants contains
bisulphite of soda. Within this specific case scenario, the mistake was been carried out by the
manufacturer and not on the part of the retailer (Peterson, 2017). The Brown has to request for
the case in order to take a legal proceeding against the manufacturer with the strict obligation.
The Brown can get complete remedy against the retailer Underwear Galore company because it
is the legal right of the customers to be informed about the contain of bisulphite of soda within
the under- pants. This way it has harmed Brown. Moreover, the Brown can legally file a lawsuit
against the Underwear Galore company because of the breach of the company by not informing
the customers about the contains bisulphite of soda within the underpants.
Also Brown can have a case against the company Underwear Galore as they have not listed out
the material and the contains of the product on the packaging. This is very essential for the
company to list out all the containment of the product so that the buyer can see and read it at time
of buying. This is essential as this proper labelling during the packaging will educate the buyer
that what all things are included in manufacturing the under- pants. Thus, Mr Brown can also file
the suit against the company on the grounds of incomplete or misleading information relating to
the product and services being provided by them (Beck and Paton, 2018). Also, Brown will be
successful in the action of filing the law suit against the manufacturer of under- pant as Brown is
right on his part and the fault or mistake is from the side of the manufacturer. Thus, Brown will
be successful as the consumer law work in the protection of the consumer and their rights only.
Thus, in accordance with the Australian consumer law Brown is correct as the company has not

informed about the under- pant containing of the bisulphate of soda and the company is liable to
pay of the compensation to Brown for the inconvenience caused to him.
WEEK 8
Advantages and disadvantages of becoming a franchisee
Franchising is a method of doing business in which one company gives rights to other company
to use the name of business and do the business in the same manner (Hargovan, 2017). The
franchisee is a person who takes the right from the franchisor to run the business. There are many
different advantages and disadvantages which are being faced by franchisee which are as
follows-
Advantages
The major advantage which the franchisee enjoys the because of franchisor is that they do not
have to build up a good brand and make efforts in it. This is majorly because of the reason that
when the franchisee has to use the business in the same manner as done by franchisor.
Another advantage is that there is already established market and consumer for the brand name
which has been franchised. Thus, this will assist the franchisee in just installing the business and
the consumer will like it without any effort of franchisee.
Disadvantages
The major drawback for the franchisee is that they cannot make any modification within the
pattern of doing the business and they cannot modify anything.
Another drawback for the franchisee is that profit margin is less as they have to pay fees and
royalty to the franchisor.
If the person wants to go for business for the first time than it is advisable to the person to go for
franchise as this is much good option for the new business launch. The major reason underlying
is that under the system of franchise the franchisee takes the right of operating the business of
franchisor under the same name. so as the person is new to the business so the franchisor
provides all the directions that how the business need to managed and it need to be managed in
the same manner as listed by the franchisor (Advantages and disadvantages of buying a
franchise, 2020). Thus, here the person has not to make any extra effort in running the business
and they just have to follow what the franchisor only. Another reason for going for the franchise
system of business is that this method has a pre- established market and goodwill of the company
and this provides a growth opportunity for the person as consumer will like this to a great extent.

Week 9
Within the case of Salomon v A Salomon & Co Ltd [1897] AC 22, it has been found out
that, the organization has been formed by effectively complying with the regulation within the
Corporation act. The company is considered to be as a separate legal entity. As per the decision
of the House of lord, the Salmon has significantly created the key principle of separate corporate
personality with the prominent limited liability concept. Corporate veil is a legal concept which
separates the personality of the corporation from the owner and shareholder of the business. This
helps in protecting the individual person from personally liable of the debt and other key
obligation of the company (Cheng-Han, Wang and Hofmann, 2019). It states that, the rights and
duties of the corporation is considered to be as the key responsibility of the company. Improper
conduct and fraud by the member of the company are the common ground when the court tends
to lift the corporate veil. In this scenario, the principle of Salmon cannot be used to escape from
any liability towards the company. Lifting of the corporate veil is the lawful decision which
helps in taking into consideration the rights or duties of the corporation.
WEEK 10
Members and shareholder
Term member and shareholder
The member within the company is defined as a person whose name is written within the register
of member of company and has subscribed the memorandum of company (Hedges, Gilligan and
Ramsay, 2017). On the other side the shareholder of the company is the one who owns the shares
of the company.
Ways in which person can become member
There are different types of ways in which the person can become the members within the
company. Some of them are as follows-
By subscribing the Memorandum of Association- this is a method within which the person
subscribes to the memorandum of the company and after that they automatically become the
member of the company.
By application and allotment- this is another method through which the person can become the
member within the company by either written agreement to take the shares or by registering in
the register of members under the Companies act.

Another way in which the person agrees to purchase the Qualification Shares which have been
signed and delivered by the director from the Registrar.
Eligibility for becoming member
There are some of the requirements for the person which they need to fulfil before becoming a
member within the company. The major requirement is that the person must not be disqualified
by any law or rule. Another requirement is that they must be competent enough to enter into a
valid contract and must not be of unsound mind or of any physical disability.
Person ceasing to be a member in a company
The person ceasing to become a member of the company means that the person is no more
related within the company and they have no stake within the working of the company (O'Brien,
Ramsay and Ali, 2018). There is various manner in which the person can cease to become the
member of the company which are as follows-
By transferring the membership of the person to some other person a member can cease to
become the member of the company.
Another method is to surrender the membership back to the company
Another method is on the death of the member that is when the member dies then automatically
the membership of that person ceases to finish.
Another method of ceasing to become the member of the company is the buy- back of the shares
by the company.

REFERENCES
Books and Journals
Beck, J. and Paton, G., 2018. Corporate law: The Royal Commission: Corporate culture
spotlight: Where is all this heading?. Governance Directions. 70(6). p.351.
Bianchi, L., 2018. Consumer law: Changes to Australian consumer law: Key benefits for
vulnerable consumers. LSJ: Law Society of NSW Journal, (50), p.71.
Cheng-Han, T., Wang, J. and Hofmann, C., 2019. Piercing the Corporate Veil: Historical,
Theoretical and Comparative Perspectives. Berkeley Bus. LJ, 16, p.140.
Hargovan, A., 2017. Corporate law: Foreign directors of Australian companies put on notice: No
leniency for ignorance of duties. Governance Directions. 69(1). p.37.
Hedges, J., Gilligan, G. and Ramsay, I., 2017. Banning orders: an empirical analysis of the
dominant mode of corporate law enforcement in Australia. Sydney L. Rev.. 39. p.501.
O'Brien, L., Ramsay, I. and Ali, P., 2018. The hidden dimension of business bankruptcy in
Australia. Australian Business Law Review. 46(5). pp.291-306.
Pearson, G., 2017. Further challenges for Australian consumer law. In Consumer Law and
Socioeconomic Development (pp. 287-305). Springer, Cham.
Peterson, C.W., 2017. Piercing the corporate veil by tort creditors. J. Bus. & Tech. L., 13, p.63.
Online
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