health care Subway NOT: asset utilization for the business limits placed on the franchisee regarding what it can do with the product and its production. The franchisee's responsibilities include: Entrepreneurs should asses their skills and interests. The International Franchise Association is ________. a. b. Which of the following types of businesses benefit from being located near competitors? a. In the franchise industry, the person or business providing the rights to an individual for the local distribution and/or sales of a specified product or service is called the: Probably the earliest example of franchising in the United States is most likely to be: A major reason for success of franchising is that the franchisor can use all of the following from the franchisee EXCEPT for the franchisee's: Which of the following industries provides the earliest and lasting example of franchising in the U.S. economy? 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. The product life cycle model is a theoretical construct that helps franchisors understand the industry cycle and the cycle of specific products or services with a franchise system's product line. quality of the competition. number of competitors. the franchise both of the above. As a class assignment, business students were told to prepare a business plan for a business they would like to own. inventory new-new 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. b. new-old, When one discusses upside gain and downside loss, one is talking about The franchisor cannot require the individual franchisee to adhere to a(n) ________. Which of the following is a true statement pertaining to single-unit franchises? A ____ is a system of distribution that enables a supplier to arrange for a dealer to handle a specific product or service under certain mutually agreed upon condtions. Which of the following agencies will most likely arbitrate this dispute? About how much work should she expect to do to make the franchisee successful? c. pay a fee. a. d. c. TRY: data analyses. E) Not be counted on, A) Provide a significant advantage for your business start-up, All of the following are advantages of franchising except ________. c. franchisor. T/F, Conducting a thorough due diligence should always be accomplished if purchasing an existing corporation or franchise, but is unnecessary if acquiring a sole proprietorship. Samantha would like to get a small business loan from the SBA. A Starbucks franchise located inside a Target store is called ___________ franchising. journal, general ledger, financial statements. A partnership agreement identifies the type and value of the investment contributed by each partner. What are they? Perhaps the greatest advantage of buying a franchise, as compared to starting a new business or buying an existing one, is that the franchisor will usually provide both training and guidance to the franchisee. Potential franchisees should examine the franchisor's package and balance the cost and the _________ being offered. Which of the following types of financial ratios measures how well a franchise meets its short-term debts or financial obligations? The franchise distribution system is composed of approximately _________ franchise business establishments that provide more than 11 million jobs. \end{aligned} Which of the following is not an element of a tort? Stuart has $50,000 to start a new business. You stop by a Carl's Jr. fast food restaurant and notice that they also have Green Burrito Mexican food. B. Franchising and franchise channels continue to grow dramatically. D. Usage tax. b. Selling a franchise to the franchisee a. Which of the following is not a type of franchising according to the text? Which of the following is not an advantage of a franchise? opportunitites. Regarding the issue of control of franchisees by franchisors, which of the following is most accurate? Which two factors are especially relevant in the scope and frequency of franchisee evaluations by franchisors? What amount is generally considered adequate? a. Companies that invest in small businesses. control exercised by the franchisor b. A franchise's economic figures must be recorded, then transferred and balanced before final calculations can be determined. Which technique is not valid for valuing a company? Renewal, Termination, Transfer, and Dispute Resolution. Upon paying the upfront fee and continuing royalties, the franchisor grants the franchisee the rights to use a. Any cost saving resulting from franchisee purchasing power helps to offset other costs, such as franchise ________. Which of the following is true regarding the costs of franchises? A. Which one of the following is not one of the required factors for successful leadership? The franchisor licenses its trademarked products to franchisees. True or false: A disadvantage of buying an existing business is that operating processes and policies have already been established. C. Nature of product and number of channel members The control issues are: 1. Hobby have the ability to quickly adapt to change. E. All of the above statements are accurate. a. Which of the following are ways in which a franchisor earns profits? the competition in the area. Firm's records b. She heard about a business model in which an individual or organization grants a license to another to operate an individually owned business as though it were part of a chain of outlets or stores. Which of the following is not a disadvantage of a major franchise? A. Adequate frontage is a necessity for most retail businesses. Which of the following is true of the risk involved in buying an existing business facing bankruptcy? This category of information offers the distinct advantages low cost and quick availability. 100, Which of the following costs add to the cost of franchising? What is the purpose of ratio analyses of financial statements? D. Service providers that wish to maintain a high degree of control over channel members are likely to use the franchise channel model. Communications between franchisors and franchisees is one-way, performance data that flows from the franchisee to the franchisor. Pay for all physical assets (e.g., equipment and building), needed to operate the franchise. B) Designated suppliers Which of the following is NOT an element of virtual relationship management in e-business strategy? Financial control procedures payroll T/F, A franchise is typically attractive because it offers training, financial assistance, and operating benefits. a. The ______ is a firm that originates the idea for a business and develops operational methods to run the business. lower WebQuestion: All of the following are reasons a franchisor may wish to maintain some degree of control and supervision over the franchisee, except to protect the franchise's name and c. guidance from the franchisor Terry's Tires made just under $750,000 last year, according to the Small Sales records are of very little value to a buyer in evaluating a company's worth. b. There is an established set of process. Bill has his own tax preparation and accounting business. franchise fees to determine the success of the franchise in meeting its overall objectives. D) Unable D) Initial inventory b. Collecting a percentage of sales from each franchisee The most significant advantage of a franchise is the increased probability of ________, given that franchise brands have positive track records and instant recognition in most communities. majority Which of the following statement most accurately describes a franchise channel? inventory turnover. Rent Many fees are must be paid regardless of ________. C. The greatest benefit to franchisors is the marketing assistance they receive from franchisees. d. time and effort are reduced This is an example o. Craig has $60,000 to invest in a new small business. This resulted in the passage of the Uniform Franchise Offering Circular (UFOC). Salability T/F, A disadvantage of purchasing a franchise is that franchisors seldom provide adequate training programs. NOT: it sometimes develops an imprecise picture of the franchise. The market research should be independent of the franchisor. D) It is unlawful to do such inspections. C. Multi-unit franchises require the franchisor to provide greater operational assistance to their franchisees than do they do for single-unit franchises. What environmental impact did European practices of land management have in Australia and New Zealand? E) Employees, A franchisor's record of success can ________. Juan has been awarded a franchise in an industry in which the franchisor has licensed him to sell and distribute its product to retailers. a trade restriction clause. asset pricing. b. equity? B) Termination of the franchise B) Calling on existing franchisees b. a. Intro to Business- Chapter 5 Flashcards | Quizlet Which of the following are tasks that need to be completed by a new owner during the transition period from a former business to a new business? prepaid expenses d. Much franchise litigation has arisen over termination of owners. Which of the following is an advantage to the franchisee? d. In what way is a franchise's control over the business greatly reduced? weaknesses. B) Business-format franchising goodwill. Jack owns a franchise. 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. The "Restrictions on the Sources of Products and Services" section of the UFOC describes _______, what the potential franchisee must purchase from the franchisor and what the franchisee can source independently. C) Penalty franchisor. company name. equipment. & H_{\mathrm{a}}: \sigma_1^2>\sigma_2^2 new-new T/F, The entrepreneur who enters into a franchising agreement does not acquire the right to use the franchisor's trademark of brand name. Generally, franchise marketing channels are more closely knit (i.e., closer relationships) than conventional channels. B. Marilyn argues that the SBA's primary function is to lend money. income or wealth. A franchise is a legal agreement. The "right questions" the prospective small business owner should ask about a franchise deal with E. The details of franchise management are vague enabling franchisees to adapt to changing environmental conditions. Franchisors must have a high-quality support 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. Why would a person choose to buy a franchise? The inventory should be examined for which of the following? E) None of the above is an exception. d. E. Single-unit franchises are a very low-cost method of selling. H0:1222Ha:12>22\begin{aligned} b. The Clayton Act makes it illegal for competitors to get together and set prices on the products or services they sell. Often, strategic initiatives fail because: They are seen as extra work to be accomplished in addition to existing work. engaging in a continuous business relationship. d. competition may be spending more money on advertising than you. T/F, Valuing a company is an easy task that results in a precise figure T/F, Financial statements can mislead a potential purchaser trying to develop an accurate business valuation T/F, A nondisclosure agreement signed by a prospective buyer shows the seller that the buyer intends to purchase the business T/F. Attorneys and CPA firms Studies have shown that the incidence of innovation among small-business workers is ___ among workers in larger businesses. d. 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. This demonstrates which advantage of a small business? determines the salaries of the corporation's officers. Business format franchising is best illustrated by the system offered by, The franchising strategy whereby an individual or firm is granted the legal right to own more than one unit of a franchised business is known as. 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. Fran's Fancy Frocks, a retail clothing store, may not exceed ___ in annual sales to qualify as a small business. Can you become a millionare by buying this business? D) Data regarding existing units Chance C) Operations c. Ellis owns a Subway franchise. new competition may reduce market share. In franchising, the _____ is the firm that originates the idea for a business and develops the operational methods. Which of the following is often referred to as the franchisee's "bible"? NOT: dealing with financial issues such as accounting and finances. whether employees with key skills will stay or leave. A) Provide a significant advantage for your business start-up The "_______" section of the UFOC contains how disagreements will be resolved. All franchisees operating under single-unit franchises own and operate one unit. Good cause B. Generally, the larger and more successful the franchisor, the greater the franchise fee that is charged. C. Lodging. b. a. c. When purchasing an existing business, the prospective owner should conduct an assessment of the current group of employees. A. What is the name of the business agreement Henry would sign? Which of the following is not included in a partnership agreement? If a franchise system is struggling, not achieving long-term success. B. a legal restraint of trade. B. Uniqueness in a product or service can be demonstrated through a new-new approach or B. training and guidance. new-new, old-old D. Is based on a percentage of the franchisee's gross sales. A well-established business model Franchisee or Franchisor: Who Gets Franchise Control | QVALON Franchises include the business name and a general plan for business operations. Sylvia has an SBA-guaranteed business loan for the average life of such loans. All of these are ways a franchisor makes money; Only franchisees operating multi-unit franchisees can own more than a single franchise.. Before we discuss who gets control of the franchise operations, lets clear up some terms about the people involved in the franchise model. The franchisor owns the trademark and business model. Upon paying the upfront fee and continuing royalties, the franchisor grants the franchisee the rights to use the trademark and business model. Charging for company-specific training courses and materials. a. A) Fees and costs c. What exactly is to be done in each segment? Capital requirements that a potential franchisee must consider prior to becoming part of a franchise system include each of the following except for: Reasons a franchise system would have corporate locations, as well as franchisee locations are shown below, except for: franchisor avoids potential conflict with franchisees that may rise based upon market and site locations. all of the above. The franchisor licenses its trademarked products to franchisees. Because of disputes between franchisors and franchisees, a program was instituted to arbitrate them. The Franchise Disclosure Document helps the franchise buyer to make a knowledgeable purchase. b. D) Promotional support His customers often talk about trikes. The acutal cost of "opening the doors" of a franchise establishment can be as high as $200,000. d. b. and Competitor factors in a buying decision do not include Which of the following small businesses could be categorized as being in the distribution industry? D. The challenges managing a franchise channel are fundamentally the same as those encountered in conventional channels. B) Financing assistance The franchisee is bound by the terms the franchise contract. A franchise is a business that markets a product or service developed by a franchisor, typically in the manner specified by the franchisor. An understanding of customers buying patterns before the business begins operations. disagreements between the two parties have increased and contract disputes are causing many lawsuits. He is considering applying to small firms because he knows that small businesses have traditionally added _____ new jobs to the economy. Franchises are governed by ________ laws and regulations. Sales tax. Which of the following statements best describes franchise channel structure? It is structured between single-unit and multi-unit franchises. This desire is referred to as. Franchisees that create a poor brand image through bad customer service _________. The "Federal Trade Commission" does not provide information on franchise success. franchisee old-old c. E) Type of product. d. machinery. Which of the following is Untrue about the policies and procedures of a franchise system? My salary has remained the same for the past 7 years, but my standard of living has fallen. b. all of the above, Coming up with a unique good or service is a _____approach, while adapting something that is currently on the market or extending the offering to an area where it is not presently available is a(n) _____approach. Which of the following statements is true about franchising? Which of the following is not an ongoing cost of franchises? Start-up standards required of franchisees may include which of the following? track record of the other franchisees as proof of success Which of the following is an advantage to purchasing a franchise?. Ch. 5 business Flashcards | Quizlet D. In a franchise, one party grants a license to another party to sell a trademarked product or service. Maria has purchased a Subway franchise. Automobile dealerships and ___ were the primary uses for franchises in the early days of franchise agreements. A. Milkshake Lending Company is a small privately owned firm providing venture capital to small businesses. b. What is the name of that program? Name the three steps used to allocate producing department activity cost pools using the ABC approach. d. The potential buyer E) All of the above. prepaid utility bills Chapter 1-4 Flashcards | Quizlet Why might co-branding be beneficial for a mature market? risk versus reward. 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. c. c. Several years ago the British government imposed a _________ is a broad area that encompasses such things as brochures, signs, logos, televisions advertisements, newspaper, advertisements, sales techniques, adn internal business design. A. The business that represents 99.7 percent of all employers in the United States is a. There are few resources for franchise research. T/F, One drawback of becoming a franchisor relates to possible new restrictions as a requirement for contract renewal. 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. B) Research All are costs.
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