DEFINITIONS OF TERMS

business format franchise

the type of franchise which includes not only a product, service and trademark, but also the complete method to conduct the business itself, such as the marketing plan and operations manuals

product distribution franchise

a franchise where the franchisee simply sells the franchisor's products without using the franchisor's method of conducting business

manufacturing franchise

franchise which is licensed by the parent company to produce and distribute its products, using supplies bought from the franchiser

UFOC

Uniform Franchise Offering Circular, a format for the disclosure which provides information about the franchiser and franchise system to the prospective franchisee

disclosure statement

the disclosure document which provides information about franchiser and franchise system

franchise

a license that describes the relationship between the franchiser and franchisee including use of trademarks, fees, support and control

franchise agreement

the legal, written contract between the franchiser and franchisee which tells each side what to do

franchisee

the person or company that gets the right from the franchiser to do business under the franchiser's trademark or trade name

franchising

a method of business expansion characterized by a trademark license, payment of fees and significant assistance and/or control

franchiser

the person or company that grants the franchisee the right to do business under their trademark or trade name

royalty

the regular payment made by the franchisee to the franchiser, usually based on a percentage of the franchisee's gross sales

area franchise

the type of relationship which allows the franchisee to open multiple locations, usually in a defined territory within a pre-agreed upon timeline

encroachment

term describing a situation where any franchisee or the franchiser attempting to sell products or services within an area of territory that has been assigned to another owner

breakaway franchisee

a franchisee who has unilaterally terminated their franchise agreement

conversion franchising

the process by which existing independent businesses or dealers within an industry become franchisees when they assume the trade name and trade dress of the franchiser

to solicit

to contact possible customers (e.g. franchisees) in order to sell something (e.g. franchise)

rental

the amount of money paid for renting something

fixtures

items that are permanently attached to the land, a home, or a commercial building an are considered the property of the land, home or building owner

franchise fee

one-time payment to the franchiser when you sign up to become a franchisee

bulk buying

buying in large amounts, often at a reduced price

kicker

a hidden and disadvantageous factor, such as a clause in a contract

rebate

an amount of money that is taken away from the cost of something, before you pay for it; a discount

trunk

the large main stem from which the branches grow

bark

the tough material that covers the outside of a tree

legwork

active physical work (as in gathering information) that forms the basis of more creative or mentally exacting work (such as writing a book)

proliferation

a rapid and often excessive spread or increase

rebuttal

a refusal to accept that something is true

terms of a contract

the conditions that are part of the contract

breach of contract

an action that your contract does not allow

daunting

discouraging; dismaying; unnerving

lessor

a person who owns something such as a house or piece of land and leases it to a lessee

assigner

a person who assign (\= transfers/conveys) something or some right (usually a contract right) to an assignee

emerging markets

markets of countries that are just starting to have influence in trade

linkage

connecting systems to work together, the action of linking or the state of being linked

conglomerate

a large organization consisting of several different companies joined by contract

extractive industry

industry that obtains its materials by drilling, mining etc. from underground

intermediate goods

goods that are partially processed but are not finished

cross-border

adjective used for organizations in two or more countries

green-field investment

direct investment in new facilities involving a big financial risk

foreign direct investment

long term investment by a foreign investor in an enterprise residing in an economy other than the one in which the foreign direct investor is based

vertical FDI

FDI with an industry abroad that provides inputs/distribution/further processing for the product of buyers domestic business

horizontal FDI

FDI with a company abroad that does the same business as the buyer

downstream operation

operation on which the other operations depend or that happened before other operations

upstream operation

operation that happens after another operation

book profit

a profit as shown in a company's accounts

paper profit

an increase in the value of an investment, which is not an actual amount of money unless the investment is sold

distributable profit

the amount of a company's profit that is available to pay dividends to shareholders in a particular period

attributable profit

a company's profit for a particular period that is owned to shareholders and is either paid as dividends or kept as reserves

consolidated profit

in a group of companies, the total profit from all the companies in the group for a particular period of time

operating profit

profit relating to company's normal activities of providing goods and services

gain

the financial profit that a person or company makes

windfall

a profit gained from an unexpected or unusual event

proceeds

all the money that you get from selling something

return

the total profit that you get as a result of putting your money to a bank, company etc

surplus

the amount of money that remains after a company has paid all its costs, wages etc.

yield

the exact amount of profit that you get as a result of lending money to a company, government etc. (the rate of income an investor receives from a security)

debt burden

amount of debt that a country has, seen as a problem

debt service

making repayments on a debt

debt justice

the idea that people should be treated fairly and equitably

debt restructuring

process wehre lenders agree that a debt can be repaid in a different way or at a different time

debt forgiveness

situation when lenders agree that a debts do not need to be repaid

debt collection

the activity of making individuals and business pay debts, usually ones that they have not paid on time or that they are refusing to pay

debt consolidation

the process of taking out a new loan (often secured on one's property) in order to pay off a number of existing debts

Treasury

the government department responsible for a country's financial matters

secured debt

debt that is supported by particular assets of the borrower

bad debt

a sum of money that has been lent but is not likely to be repaid

outstanding debt

not yet paid debt

toxic debt

loan and other types of debt that have a low chance of being repaid with interest

revolving debt

credit that you can continuosly draw on as long as your accounts are open and you haven't hit you limit

installment debt

debt which you typically repay in regular monthly installments featuring a fixed amount

external debt

money that a country owes to lenders abroad

public debt

money owned by a local or national government

corporate debt

money owed by businesses, rather than governments or individuals

import tariff

tariff on goods coming into a country from abroad, often used as a way of reducing imports and protecting local industries

ad valorem tariff

a tariff that varies depending on the value of goods

punitive tariff

an extra tariff charged on goods going into or out of a country introduced because a country has done business in an illegal way

multiple tariff

a tariff with different rates that depend on a country the goods are coming from

compound tariff

a tariff with two parts that depends on the parts, one that depends on the value, and one that is a fixed amount

protective tariff

the tariff aimed at controlling the amount of foreign goods entering a country, protecting home producers from foreign competition

patent cliff

sharp decline in revenue or profitability when a firm's patents expire, opening them up to competition

conglomeration

two companies that have a common business areas

premium

an additional amount of money above standard amount or rate reduction

consolidation

reduction in companies in a sector through merger increase

streamlining

increase in efficiency often resulting in cost savings

market capitalization

the total value of all shared on a stock market at a particular time

vertical integration

joining of a customer and company or a supplier and company

forward integration

a merger with the acquisition of one's marketing outlets

backward integration

a merger with the acquisition of one's suppliers

stock swap

a merger that only involves the exchange of company's shares

market-extension merger

two companies that sell the same product in different markets

junk bond

a bond that has high rate of interest but a high risk of not being repaid

outstanding shares

all of company's shares that currently exists and are held by shareholders

due diligence

when a company thinking of buying another looks carefully at its accounts as it must do by law before the deal can be agreed

product-extension merger

two companies selling different but related products in the same market

horizontal merger

two companies that are in direct competition and share te same product lines and markets

raid

buying another company's shares on the stock exchange, hoping to persuade enough other shareholders to sell to take control of the company

synergy

term used to describe that combined production is greater than the sum of the separate parts

takeover bid

a public offer to a company's shareholders to buy their shares, at a particular price during a particular period, so as to acquire a company

target company

a company that is the subject of an attempted acquisition by a potential buyer

tender offer

situation when an acquiring company offers to by stocks from shareholders at a premium over the market price with the intention of purchasing enough shares to control equity interest in the target company