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? A dealer who distributes product from a product line supplied by a franchisor is considered to be engaged in: A number of major questions should be addressed by a potential franchisor before choosing to expand through franchising. His customers often talk about trikes. If he seeks the average-size SBA-guaranteed business loan he will borrow, Money invested in small, new, or struggling firms that have the potential to become very successful is called. C) Inclusive franchising control exercised by the franchisor a financial investment. The product quality is within the perception of the customer and is greatly influenced by the franchise system's server. Considering the processes of management for a the franchise system, overall planning of the firm for today's operations and the future of the system itself is the primary responsibility of, NOT: franchisees The advantages of franchising include: Master franchises do not allow individuals and organizations to buy the right to subfranchise within a delineated geographic territory. Trade associations for the industry. Product and trade-name franchising is the licensing of the product or the production of the product and the use of the trademark, logo, or other identity of the franchise. pay a fee. 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." Buildings 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? Develop strategic plans for the franchise firm. False T or F? The two main reasons for failure in business are: NOT: inadequate business plan and poor management. Entitles the franchisee the right to open a business in a given area. the franchisor Which of the following statements most accurately describes the success rate of franchises? Franchisees may pay a fee that is separate from the royalty fee, often called a ________, to contribute to a shared advertising fund. Which of the following are ways in which a franchisor earns profits? The elimination of time and effort associated with starting a company is an advantage of acquiring an ongoing venture. all of the above. Which one of the following is Not a common method of borrowing funds in the short-term when considering the rate of interest to be paid: To fund a franchise business, most franchisee use: In financial planning with the franchised business, the most basic and essential variable of the financial planning tools is the: All of the current assets of the firm, or more specifically, current assets minus current liabilities equals: Estimation of sales and other income for a period and cash disbursements to be paid in the same period identifies the components of the: What is the primary purpose of information systems in a large franchise? As it pertains to the scope and importance of franchising, which of the following statements is most accurate? Education courses a. Which of the following is a disadvantage for the franchisor? The "Restrictions on What the Franchisee May Sell" section of the UFOC describes ____________. Financial control procedures c. Which of the following things is NOT true about the accounting process? d. a. 3 reasons for buying an existing business. d. Policies and procedures for running the business. a. E. All of the above are about equal. Is the building heated with gas or electric? a. E. Possible high level of managerial motivation fostered by franchising. C) Ensures ongoing support E) All of the above, Which of the following aspects would the franchisor control in a business-format franchising situation? b. explanation: Franchisees often report the following advantages: management training and support; brand-name appeal; standardized quality of goods and services; national advertising programs; financial assistance; proven products and business formats; centralized buying power; site selection and territorial protection; a greater chance for success. In the United States, ___ account(s) for 97.5 percent of all identified exporters and produce(s) 31 percent of export value. Mary's Models is a successful model airplane store. d. Jennifer and Raleigh are considering starting a small business and are weighing the pros and cons of doing so. Chance, What is an often overlooked asset when acquiring a new business? new-new The costs of franchises vary significantly. C. Generally, franchise marketing channels are more closely knit (i.e., closer relationships) than conventional channels. invest money in the operation. A trial period of at least 3 years C. Court permission D. Notice to the Franchisees may pay a fee that is separate from the royalty fee, often called a cooperative advertising fee, to contribute to an individual advertising fund. Which of the following would not be a good reason to start a small business? E. All of the above. b. new-new a. Terry's Tires made just under $750,000 last year, according to the Small Business Administration. There are approximately ___ businesses in the United States. True or false: Individual thinking they were buying franchise that gave them an opportunity for success found that they had paid for what amounted to little more than a name. All of these are ways a franchisor makes money; Degree of control and importance of channel members The start-up and ongoing assistance provided by a franchisor guarantees your success. When one designs a unique good or service, the individual is said to have used a(n) ____approach to starting the business. The local Small Business Administration Office Which of the following statements regarding franchisors' long-term success are true? Negotiating a deal to acquire exactly what is required from the operation. legal and professional fees Which of the following are areas that the potential franchisee may be able to negotiate with the franchisor? c. Studies have shown that the incidence of innovation among small-business workers is ___ among workers in larger businesses. Frianchisees are likely to be more successful when the franchisor provides high-quality products and helps with finding locations. Not coincidentally, these issues have become more prevalent and evident with the advent of none of the above. age of the competition's owners. C. The franchisor provides little beyond a license to use its trademarked products. A) Required D) Many legal disputes T/F, Because the offering and sale of a franchise are more intensely regulated by state and federal laws than is the establishment of a new business, individuals and/ or firms involved in negotiating a franchise arrangement have limited need for legal counsel. Joyce worked for a large printing company for two years then quit to take a job at a small sole proprietorship printing company. The inventory should be examined for which of the following? T/F, As of 2008, the Federal Trade Commission's Franchise Rule presribes that franchisors must disclose to prospective franchisees info such as bankruptcies, business experience of the principals, and litigation in which the firm is involved. Firm's records Brent and Wendy plan to open a new business. It is not uncommon for a buyer to be faced with a franchise fee of 250,000 to 1,000,000. b. Chapter 6 ent Flashcards | Quizlet NOT: prospective franchises being recruited into the system. goodwill. a. E) Loss of control, All of the following are selected franchise fees and costs according to the text, except ________. Only franchisees operating multi-unit franchisees can own more than a single franchise.. franchatter. d. competition may be spending more money on advertising than you. What is a realistic number for a sample size when doing market research? (pg 134) according to Brian Hendricks, what are the 5 "p's" of entrepreneurship. Franchisees that create a poor brand image through bad customer service _________. Much franchise litigation has arisen over termination of owners. a. D) It is unlawful to do such inspections. d. c. d. B. Identifying one or more target markets and creating a marketing mix that has focus upon a customer grouping's needs is the definition of. C. Multi-unit franchises require the franchisor to provide greater operational assistance to their franchisees than do they do for single-unit franchises. Which of the following is not a key question a prospective buyer needs to ask in buying a business? Renewal, Termination, Transfer, and Dispute Resolution. A. He was referring to, the reality that small business workers are more innovative than workers in large businesses, The invention of insulin and power steering by small businesses are examples of the ability of small businesses to provide, Increases in productivity for the past 200 years are characterized by, new ways to do a job with less effort and at a lower cost. d. Debt Service E) All of the above, The FDD includes information such as ________. your financial backer. Which one of the following is not a major question at the onset? Competitor factors in a buying decision do not include a. Actions by franchisors to void the contracts of franchisees in order to sell the franchise to someone else and collect an additional fee. Bringing two or more franchise brands together within a single enterprise. The exercise of reasonable care in the evaluation of a business opportunity. loss of freedom and control as franchise system grows. a trade restriction clause. Franchisors sometimes act like a business partner. Marketing strategy. Where should you retire someday? How long has a franchisor been in the business? Jack owns a franchise. Many franchisors require potential franchisees to work for an established franchisee for a period of time because they _________. a. C. Increased regulatory scrutiny. B. a, b, and c above, When this asset is purchased, the buyer should be sure to deduct those so old that they are deemed uncollectible. Franchises are governed by ________ laws and regulations. Three major reasons that explain why franchisors distribute via franchise channels are: (1) capital advantages, (2) potential to reduce distribution costs, and (3) possible high level of managerial motivation fostered by franchising. engaging in a continuous business relationship. B) Consistency b. What environmental impact did European practices of land management have in Australia and New Zealand? A leading apparel manufacturing firm in the United States invites applications to establish franchises in Texas. A sample of 16 items from population 1 has a sample variance s12=5.8s_1^2=5.8s12=5.8 and a sample of 21 items from population 2 has a sample variance s22=2.4s_2^2=2.4s22=2.4. test review chapter 7 Flashcards | Quizlet franchisor Leticia has always wanted to own her own restaurant but has read that restaurants have a very high failure rate. Which of the following does Smoothie King founder Stephen Kuhnau credit as the reason for his success? franchises have a very high success rate compared to other small businesses. inventory turnover. What type of competition exists? There is a higher likelihood of success. d. d. B) Not required Franchising and franchise channels continue to grow dramatically B. Match the situations involved in the negotiation process between a franchisor and a franchisee with their likely outcome: The franchisor might negotiate a complete different deal with the granchisee in order to get started with a self-sufficient operator. One of the special focus areas of the SBA is to, assist minorities wanting to start or expand small businesses, A business seeking a loan through the Small Business Administration will actually be given a loan through. When Reno purchases the McDonald's she will be expected to supply, labor and capital and will own and operate the outlet. C. Franchise fee. Business situations that are appropriate to consider when looking for growth through franchising include all but which one of the following? Where should the business be located? B) Termination of the franchise D. Usage tax. franchisor. McDonalds is the only franchise available for ownership internationally. The owner may be in trouble with suppliers. provide continuing aid and a guidance to the person buying the franchise. new-old, old-old Pick the correct phrase from the following that best characterizes the relationship between franchisors and franchisees. A) Training d. c. 9 True or false: A franchisor and a franchisee are both dependent on each other for success. Pizza Hut The general purpose of a promotions package by the franchisor to potential franchisees is to: From a broad perspective, ( ) means effective communication and promotion of the franchised product or service to the targeted audience. NOT: Multi-unit Franchisee. b. B) Be a concern for a franchisee Charging for company-specific training courses and materials. The potential buyer The way to approach a new business venture is to think up a good or service that is unique. A lawyer B) Brand recognition procedures are essentially "set in stone.". d. Business Brokers help entrepreneurs locate the funds necessary to start a business. the market. E. None of the above. Though a location manual or policy may be developed to assist in determining optimal sites, for franchised businesses that require a store-front location the final determination often rests with: Which two concepts receive primary consideration when determining store layout? The franchisor licenses its trademarked products to franchisees. c. Which of the following is a true statement pertaining to single-unit franchises? a. WebProbably the earliest example of franchising in the United States is most likely to be: McCormick Harvesting Machine Company. b. b. Which of the following best describes the industry she operates in?
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