Which of the following statements regarding franchisors' long-term success are true? Prior job This is a ___ business. accounts receivable B) Designated suppliers legal and professional fees a. Which of the following are benefits of purchasing a franchise? What types of customers does this store attract? True or false: A disadvantage of buying an existing business is that operating processes and policies have already been established. to determine the success of the franchise in meeting its overall objectives. b. machinery. c. Supplies Generally, the larger and more successful the franchisor, the greater the franchise fee that is charged. Why might co-branding be beneficial for a mature market? d. One downside for franchisors participating in franchise channels is: the financial picture of the business. Policies and procedures for running the business. Where should you retire someday? How much of successful selling consists in simply listening to the prospective buyer? a. If you don't know how you want to be positioned in the marketplace, and don't know the value propositions you uphold, then you will be: positioned in the market-place and educated on that position by your competition. Companies that invest in small businesses. T/F, One benefit of becoming a franchisee is sharing a profits with the franchisor. D. In a franchise, one party grants a license to another party to sell a trademarked product or service. WebThe Franchisor bills and received payment from the customer directly, and then after deducting its royalties and other fees and payments, sends the Franchisee the balance; If A trial period of at least 3 years C. Court permission D. Notice to the insurance Negotiating a deal to acquire exactly what is required from the operation. c. c. E. Royalty fee. Competitor factors in a buying decision do not include Start-up standards required of franchisees may include which of the following? b. maintain a specified quality of performance. 9 Brent and Wendy plan to open a new business. d. An advantage associated with franchising is must be provided to the potential franchisee early in the process. The ability to leave the venture if an entrepreneur does not enjoy the business is severely limited. C. Generally, franchise marketing channels are more closely knit (i.e., closer relationships) than conventional channels. a. Pewterschmidt Company values its inventory reported in the financial statements in terms E) All of the above, The term "FDD" stands for which of the following? The reason franchises have been a popular form of business is due to ___________. B. franchising The way to approach a new business venture is to think up a good or service that is unique. In this scenario, John is a _____. D) Legal action amount to the government independent of his or her The category most franchise systems are in is the one that has focus on product or service qualities or characteristics with prices being a second-level or a lower order concern to the purchaser. This includes all of the following except: a. Payroll What is the effect of such a tax on f(t)=t+2t2f(t)=\frac{t+2}{t^2} new competition may reduce market share. The founding a franchise is quite ________ in form and method to creating a new business from scratch. is the principal governing mechanism of the franchisor-franchisee relationship. d. It is always important that you weigh the advantages vs. disadvantages in purchasing a franchise. Which of the following statements most accurately describes the success rate of franchises? Which is the most important and why? In the franchise system's "Bankruptcy" section of the UFOC, the company must disclose which of the following? In 2016, the International Franchise Association reported that franchises in the United States (US) provided nearly ______ direct jobs. a. b. to generate data which can be used to accumulate working knowledge. What amount is generally considered adequate? d. Operational Control. track record of the franchisor D. Franchising is an American business model that does not work well outside the U.S. There is one thing every franchise system knows. Sales tax. An agreement not to compete is also known as This is higher than _____, the amount the Census Bureau and Federal Reserve say 50 percent of all new businesses begin with.. A(n) ____ is a carefully constructed plan for an individual starting a business. B) Franchisee Disclosure Document c. Franchising and franchise channels continue to grow dramatically. A) Fees and costs Changes in the product supply chain. Which of the following is an intangible asset? Marketing strategy. Prior job c. Richard orders some Harley-Davidson Trikes for his inventory. How does Auntie Anne's ensure that new franchisees understand the company's operational approach? d. The "_______" section of the UFOC contains how disagreements will be resolved. b. D) Federal Disclosure Document Leticia has always wanted to own her own restaurant but has read that restaurants have a very high failure rate. C) Popularity Franchisors must have a high-quality support b. Which descriptor is not a part of the definition or franchising? A) Provide a significant advantage for your business start-up Changes in leasehold conditions. the cost of replacing an employee. NOT: anticipated costs of operation. System to network with competing franchises. Which of the following is an advantage to the franchisee? A. a. equity? Which of the following organizations can assist him? He has read about the success rates of franchises and the success rates of start-up businesses. d. Trade associations for the industry. a. plant A) Franchise Disclosure Document Which of the following things is NOT true about the accounting process? The franchisor provides a system for the franchisee to operate the business. c. the owner's family stability and relationships. What is a realistic number for a sample size when doing market research? Which of the following statements regarding the franchise fee are correct? Compared to other types of businesses, the failure rate for franchises is __________. c. T/F, One drawback of becoming a franchisor relates to possible new restrictions as a requirement for contract renewal. The franchisee is bound by the terms the franchise contract. A) Required B. A. C) Never provide help for start-up Uniqueness in a product or service can be demonstrated through a new-new approach or a new-old approach. new-old. To better understand the demand for a product or service. loss of freedom and control as franchise system grows. Externally dedicated to the market, yet internally focused on production, seeking to produce high-volume or high-value product/service while carefully examining any new opportunities for costs/benefits in relation to known strengths of the firm, is a description of which one of the market-focused business strategies identified below. Ellis owns a Subway franchise. If you decide to purchase a franchise, you will have to pay. A) Type of franchise E. All of the above statements are true. Entrepreneurs tend to work harder and take moderately greater risks than persons working as employees in someone else's firm. Often, strategic initiatives fail because: They are seen as extra work to be accomplished in addition to existing work. Darrel is considering expanding the business by franchising. According to the text, which of the following is not a consideration when selecting a franchise? b. a. B) Advertising and promotion d. A Starbucks franchise located inside a Target store is called ___________ franchising. a. WebAll of the following are a new type of franchising opportunity except ________. Which of the following small businesses could be categorized as being in the distribution industry? a. The planner will want to find the answers to all of the following questions except. Which of the following is Untrue about the policies and procedures of a franchise system? she will work very hard putting in long hours about six days a week, The SBA assists small-business owners entering the world markets by doing all of the following except, offering long term loans to US business owners. Maria has purchased a Subway franchise. Business related reasons for selling may include all but which of the following? Reviewing personnel of the business about to be purchased is important in order to determine There is a higher likelihood of success. f(t)=t2t+2. Opening a franchise business has a great deal in common with _________. C. Nature of product and number of channel members WebWhat is usually required for a franchisor to terminate a franchise? Potential franchisees should examine the franchisor's package and balance the cost and the _________ being offered. They meet with a business planner who helps them compile a business plan. d. A. C) Fixtures Who is correct? number of competitors. C. Franchise fee. Matilda would like to open an ice cream and sweet treats store but she will need a loan to do so. The implementation of marketing mix variables in franchise channels is less fluid and flexible than in conventional channels. d. The most common form of franchising today is one in whic. A) Accounting Which of the following antitrust legislation laws makes it illegal for competitors to get together and set prices on the products or services they sell? b. A) They may be announced or unannounced. "When sales continue to grow but are increasing at a decreasing rate" is associated with which stage of the product life cycle? d. b. A) Fully understanding the FDD of the franchise company What exactly is to be done in each segment? True or false: A poorly performing or disruptive franchisee detracts from the overall operations as well as taking time and effort of the franchisor away from the business of growing the brand. c. success will cause another outlet to be opened nearby. What are the typical payments paid by a franchisee to a franchisor? Can you become a millionare by buying this business? Compensate the franchisee for the use of its trademark. This is an example o. Craig has $60,000 to invest in a new small business. C) Operations Which type of franchisor program offered to franchisees is based on the general notion that new franchisees have little or no specific business knowledge about the franchise system? Which of the following are benefits of purchasing an existing business? a. What is the primary purpose of information systems in a mid-size franchise? franchisette. the franchisor still maintains a great deal of control. B. What are they? Which one of the following is not a major question at the onset? a, b, and c only. Many fees are must be paid regardless of ________. market value. E) All of the above, Which of the following aspects would the franchisor control in a business-format franchising situation? d. c. B. symbols and logos. NOT: it sometimes develops an imprecise picture of the franchise. E) None of the above, All of the following are factors of franchise cost except ________. c. c. E) Not be counted on, A) Provide a significant advantage for your business start-up, All of the following are advantages of franchising except ________. The control issues are: 1. a. The business that represents 99.7 percent of all employers in the United States is a. Which of the following businesses would most likely be included in the production industry? a. b. This resulted in the passage of the Uniform Franchise Offering Circular (UFOC). E. Single-unit franchises are a very low-cost method of selling. It is most likely that, it may take several years for this business to begin to show a profit, Barrack opens a bagel shop and at the end of each day has five dozen bagels left over that he cannot sell the next day due to health code restrictions. a. Which of the following is not included in a partnership agreement? Sylvia has an SBA-guaranteed business loan for the average life of such loans. Macy because the SBA's primary financial function is to guarantee loans. the franchisee Business students at universities can work together to provide management counseling to small businesses in their community. D. System to network with competing franchises. Under a franchise agreement, you can sell the franchisors products and services, provided that you have invested in the franchise and paid the annual fees. Conversely, franchises typically have an established brand, streamlined management practices, and ongoing support. How many of the personnel will remain with the firm? Business situations that are appropriate to consider when looking for growth through franchising include all but which one of the following? The franchisor is the second party to the franchise agreement and is the owner of the unit or territory rights. If you are looking to start a business that is creative and is not controlled by others, then franchising is your best option. health care Upon paying the upfront fee and continuing royalties, the franchisor grants the franchisee the rights to use firms that have complex internal systems to execute, that draw from a limited pool of qualified employees, or require significant amounts for training to assure franchisee competence in delivery of the system's products or services. D) Capacity to secure franchisees _________ is a broad area that encompasses such things as brochures, signs, logos, televisions advertisements, newspaper, advertisements, sales techniques, adn internal business design. The potential value of any Which one of the following is not part of a franchise business arrangement? NOT: customers the franchisor goodwill What advantage of a small business does Bill enjoy? Which of the following types of financial ratios measures how well a franchise meets its short-term debts or financial obligations? c. Which of the following agencies will most likely arbitrate this dispute? Is usually a one-time flat fee paid by franchisees to franchisors. d. a financial investment. Offer new products/services in new territories to new customers, One who owns and operates more than one franchise unit is known as a, NOT: Area Developer What type of competition exists? Which major question in his business plan does this statement address? He has misjudged, In order to operate a successful small business, the entrepreneur should be most concerned with, Jeff Katz, the founder of Orbitz,Inc., when speaking about new businesses recently said, "A flat checkbook is the mother of invention." engaging in a continuous business relationship. According to the text, the most important reason why franchisors adopt franchise channels is: a. Charging for company-specific training courses and materials. brand-name appeal. the market. The franchise's time frame. This is the most common form of franchise channel structure. A. a. Which of the following is a disadvantage for the franchisor? After all of your investigation into a franchise, the final decision should be up to d. Which of the following is not an element of a tort? B) Be a concern for a franchisee E. All of the above. The _________ is the entrepreneur who buys the franchise from the ________. Stuart has $50,000 to start a new business. The prospective investor should get as much information as possible on the franchisor. D) Data regarding existing units What is the name of the business agreement Henry would sign? old-old franchise E. The desired degree of control of franchisees by franchisors is not relevant to the decision by franchisors to use the franchise channel model. Most franchisors have a ________ page where potential franchisee can contact them for more information. a. E) All of the above, The FDD includes information such as ________. Marilyn and Macy are arguing about the primary financial function of the Small Business Administration. B) Financing assistance Which of the following is NOT one of the four P's of selling? b. John, an entrepreneur, approaches the firm with a proposal. There are approximately ___ businesses in the United States. A) Franchisor agreement In multi-unit franchisees, franchisees receive permission from the franchisor to own and operate more than one unit at the outset of their relationship, whereas single-unit franchises initially only receive permission to operate a single unit. pay a fee. 23 41 C) Ensures ongoing support Importance of channel members and nature of product E. Number of manufacturers in the industry. NOT: Multi-unit Franchisee. Potential franchisees should evaluate franchisors' operations based __________. a. This desire is referred to as. c. His customers often talk about trikes. a. How many years will she have to repay the loan? "Pro forma" accounting statements as used in business financial planning means: a statement of anticipated costs and revenues or change in assets, liabilities and equity based upon prior (operating) financial performance. c. new-new, new-old NOT: asset utilization for the business Which of the following is true about co-branding? C. Lodging. What is the first step to good site selection? Subway All of the following are disadvantages of franchising for the franchisee, except for: typically operate as a non-unionize business establishment. Milkshake Lending Company is a small privately owned firm providing venture capital to small businesses. B) Calling on existing franchisees a. NOT: to improve operations at franchised units. E) All of the above. A well-established business model Chance, What is an often overlooked asset when acquiring a new business? The extra value a business can command in a sale is known as b. Suggests the franchisor provides relatively little in the way of management assistance to the franchisees. WebFrianchisees are likely to be more successful when the franchisor provides high-quality products and helps with finding locations. For Jerry's Automobile Parts Fabricating business to qualify as a small business, it can employ no more than ___ people. After doing routine background checks, the firm permits John to open a branch of the firm in a given area, use the firm's name, and operate a business within the guidelines of an agreement. T/F, A disadvantage of purchasing a franchise is that franchisors seldom provide adequate training programs. c. Identifying one or more target markets and creating a marketing mix that has focus upon a customer grouping's needs is the definition of. sales taxes, business taxes, property taxes, employee taxes. Four factors are important in determining the size and shape of a primary service area (PSA). A corporation pays taxes both on its income and on the amount it pays out in dividends, it faces very little government regulation. Which of the following are resources that an entrepreneur can typically use to find a business for sale? He states in the plan, "This business will serve over 400 customers by the end of the year and employ ten full-time employees."
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