Travel Reference
In-Depth Information
Limited liability partnership (llp)
have a number of advantages over other types of
business start-ups, for example:
A limited liability partnership (llp) is similar to a
standard partnership, but it also offers reduced
personal responsibility for business debts. Unlike sole
proprietors and partners of ordinary partnerships, the
llp itself - not the individual members - is responsible
for any debts that it runs up, unless individual members
have personally guaranteed a loan to the business.
Limited liability partnerships are not very common in
travel and tourism since they are more complicated
to set up and run than ordinary partnerships because
they have to meet many of the same requirements as
limited companies.
1.
The product or service has already been tested by
other businesses;
2.
Larger, well-established franchisors have national
advertising campaigns;
3.
Some franchisors offer training programmes for
franchisees;
4.
Good franchisors can also help secure funding for
new franchisees.
Disadvantages of franchising include the fact that a
share of the franchisee's turnover goes to the franchisor,
which reduces overall profi ts, the franchisee's freedom
to manage the business is limited and initial fees can
be high.
Sole proprietor
As the name suggests, a business run by a sole
proprietor (or sole trader) is owned and controlled by
just one person. It is the simplest way to run a small
business and doesn't involve paying any registration
fees. Keeping records and accounts is straightforward
and the owner gets to keep all the profi ts. There are
many examples of sole traders working in the travel
and tourism sector, e.g. tour guides, caterers, activity
instructors, business consultants, taxi drivers, etc.
The main disadvantage of being a sole trader is that
the owner is personally liable for any debts that the
business runs up. This means that a sole trader's home
and other assets may be at risk if the business runs into
trouble.
Franchise arrangements are fairly common in travel and
tourism, particularly in the catering sector, e.g. O'Briens
Irish Sandwich Bars, Domino's Pizza, McDonalds and
Subway sandwich outlets. Some car rental branches are
also run as franchises, for example Budget and Hertz.
The Global Travel Group is a franchise operation in the
travel agency industry.
Weblink
Check out this website for more
information on the British Franchise
Association.
www.thebfa.org
Figure 2.1 summarises the key advantages and
disadvantages of the main business structures found in
travel and tourism organisations.
Inbound, outbound and domestic
tourism
Franchise
Buying a franchise is a way of taking advantage of the
success of an established business. The 'franchisee'
buys a licence to use the name, products, services
and management support systems of the 'franchisor'.
Payment for the franchise may be through an initial
fee, ongoing management charges, a share of the
franchisee's turnover, or a combination of all three.
A franchise business can take different legal forms -
most are either sole traders, partnerships or limited
companies. Whatever the ownership structure, the
franchisee's freedom to manage the business is limited
by the terms of the franchise agreement. Franchises
Unit 1 showed us that tourism can be divided into
inbound, outbound and domestic (see page 3). Travel
and tourism organisations are involved in each of these
types of tourism in a variety of ways, for example:
•
Travel agencies are mainly concerned with selling
holidays abroad (outbound tourism), but may
also offer holidays and short breaks within the UK
(domestic tourism);
