Continuing royalty fees The most important area to examine prior to purchasing a business is company profitability. b. E) Type of product. To properly develop a franchise system the franchisor must develop the franchise system at three different levels. The most significant advantage for a franchisee is the increased probability of success. _________ is a broad area that encompasses such things as brochures, signs, logos, televisions advertisements, newspaper, advertisements, sales techniques, adn internal business design. 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. Which practice is a competitive concern for franchisees? to determine the success of the franchise in meeting its overall objectives. The control issues are: 1. provide professional management training to the unit's staff. My salary has remained the same for the past 7 years, but my standard of living has fallen. C) Fixtures b. Part of the motivation for a franchisor to develop a franchise system is to ensure consistency throughout the business units in the system. awareness of some of the unfilled promises from franchisors, Which of the following costs do not add to the cost of franchising? 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. 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. E. All of the above. An entity or invidiual granted the right to conduct business according to specified methods and terms of another party is known as a, A legal agreement between two parties in a franchise arrangement is referred to as a, benefits of becoming a franchisee include all of the following terms except, Franchise costs include all of the following expenses except. This desire is referred to as. old-new Franchisees that create a poor brand image through bad customer service _________. It is not uncommon for a buyer to be faced with a franchise fee of 250,000 to 1,000,000. T/F, A disadvantage of purchasing a franchise is that franchisors seldom provide adequate training programs. It is always important that you weigh the advantages vs. disadvantages in purchasing a franchise. Web4-family background. a. c. d. It has an established cash flow. the franchisee The acutal cost of "opening the doors" of a franchise establishment can be as high as $200,000. As a franchisee you will benefit from the purchasing power of the franchisor to get lower costs and improved vendor service. old-new 1- Reduced risk of failure. b. Importance of channel members and nature of product B) Business-format franchising Add appropriate labels. d. Franchisors capitalizing or financing their businesses are generally required to disclose three key financial statements. franchisee all of the above. a. "The Franchisor, Its Predecessors, and Affiliates" section of the UFOC _________. Which one below fits the description of----goods or services that are frequently purchased, usually are low-to- competitively priced, and staples, emergency or impulse buys. insurance A. Chance have the ability to quickly adapt to change. c. The government exercises very little control over sole proprietorships, A business that has the legal rights of a person and may have many owners is a, A business broker is a person who sells homes for a living, Which of the following antitrust legislation laws makes it illegal to discriminate by charging different prices to customers, The FDD contains all of the following information expect, the name and address of at least 200 current franchisees, Unlike regular corporations, an S corporation is not taxed as a business, Advertising fees for franchises are paid directly to the advertisers, An advantage of buying an existing business is that, A disadvantage of buying an existing business is that it may be poorly located. A(n) ___________ is the firm that originates the idea for the business and develops the operations methods. lower c. track record of the franchisor Wherein the goal of the market-focused business strategy is to identify and supply product/service to discrete segments with promise of strong demand yet allowing for flexibility in meeting demand and where a firm can concentrate its internal resources describes characteristics of which of the following four market-focused business strategies? price competition may affect profits. c. Brenda has a small grocery store in a residential neighborhood where she primarily sells staples to the people who live in the area. Ability to achieve a good golf score while making sales to prospective franchisees. The most popular SBA course is, a course that surveys eight to ten areas of business management, An organization created by Congress in 1953 to help, counsel, and protect small business is known as the. limits placed on the franchisee regarding what it can do with the product and its production. B. a. The International Franchise Association is ________. Business services. Which is not a start-up expense? This includes all of the following except: The Antitrust Division of the Federal Trade Commission takes legal action against any business it believes has tried to monopolize an industry. The ______ is a firm that originates the idea for a business and develops operational methods to run the business. a. How many years will she have to repay the loan? The franchisor owns the trademark and business model. Prior job new-new, new-old market value. A) Type of franchise Some franchisors provide different levels of support depending on how much the franchisee is willing to pay. To be a successful leader, Jim Peterson, franchisor and former President of the IFA, believes it is necessary for four factors to exist for a person to be a successful leader. The start-up and ongoing assistance provided by a franchisor guarantees your success. 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) Fully understanding the FDD of the franchise company age of the competition's owners. What type of competition exists? Start-up standards required of franchisees may include which of the following? D. Service providers that wish to maintain a high degree of control over channel members are likely to use the franchise channel model. What is the primary purpose of information systems in a start-up franchise? d. E. The desired degree of control of franchisees by franchisors is not relevant to the decision by franchisors to use the franchise channel model. b. A realistic estimate for the cost of legal requirements to begin a franchising system could be: How many phases are included in the Franchise PERT Chart? On-site management In exchange for an ownership share, small businesses receive financing from a group of investors known as Who is responsible for these activities and outcomes? a. What is your conclusion using the p-value approach? Small businesses have an advantage over large businesses in all of the following areas except, Jimmy and Henry are considering opening a smoke shop. Samantha would like to get a small business loan from the SBA. The "right questions" the prospective small business owner should ask about a franchise deal with a. d. Adequate frontage is a necessity for most retail businesses. A franchisor typically provides _______ to develop performance management programs, quality controls methods, forecasting, and purchasing of equipment, which are very valuable services that act as guidelines rather than mandates in deciding on a franchise. According to the SBA, in 2012 women were 51 percent of the U.S. population, and owned at least ___ percent of all small businesses. The action plan covers 3 primary areas: the owner, the finances, and other vital factors. An advantage to buying an on-going business is What advantage of a small business does Bill enjoy? b. E) Not be counted on, A) Provide a significant advantage for your business start-up, All of the following are advantages of franchising except ________. D. System to network with competing franchises. A potential franchisor is concerned that the franchisees will destroy the reputation of the company and end up hurting his business. The "Federal Trade Commission" does not provide information on franchise success. D. Single-unit franchises enjoy a favorable image among consumers. B. b. a. the franchisee's revenue stream is fairly consistent because franchisers pay fixed fees and The motivation of franchise channel members has less to do with cooperation and partnerships than in conventional channels. A. B) Eases the issues of start-up development E) All of the above. Payroll d. C. Companies like Proctor & Gamble frequently use the franchise channel model for distribution of consumer goods. Which of the following statements best describes franchise channel structure? Which two factors are especially relevant in the scope and frequency of franchisee evaluations by franchisors? prepaid expenses Renewal, Termination, Transfer, and Dispute Resolution. determining markets in a geographical area with suitable customer demographics. Which of the following small businesses could be categorized as being in the distribution industry? Generally, franchise marketing channels are more closely knit (i.e., closer relationships) than conventional channels. A. According to the U.S. Census, ( ) are the fastest growing segment of small business ownership today. D) Initial inventory a trade restriction clause. c. C. Franchise agreement E. Number of manufacturers in the industry. d. a. If you decide to purchase a franchise, you will have to pay. Which one of the following is not one of the required factors for successful leadership? Which of the following is NOT one of the four P's of selling? a. health care The way to approach a new business venture is to think up a good or service that is unique. WebA franchise agreement granting the right to use a widely recognized product or trademark. d. The potential value of any NOT: Multi-unit Franchisee. Which technique is not valid for valuing a company? Attorneys and CPA firms E) None of the above, All of the following are factors of franchise cost except ________. d. A lawyer d. The potential buyer the franchisor What is the key to convincing someone to purchase your franchise, product, or service? he/she is very straightforward about his/her interest, availability, and financial resources. What is the first step to good site selection? D) Legal action Is a specialized broker who handles all arrangements for closing a buyout, The purchase price of a business is determined by the negotiation between. E. None of the above. Identify which generic category fits most franchise systems below. a. The individual who buys the franchise is the the owner's reason for selling. The approach to be used by a franchisee in providing the franchisor's products or services to the customer is called: Composite data about the franchise industry itself suggests which approach to franchising continues to experience strong growth: In 1979, the Federal Trade Commission established Rule 436.1, also known as the Franchise Disclosure Act, for the purpose of: diminishing illegal and unethical practices. All of the following are a new type of franchising opportunity except ________. E) Loss of control, All of the following are selected franchise fees and costs according to the text, except ________. b. d. C) Inclusive franchising C) Popularity c. C. Multi-unit franchises require the franchisor to provide greater operational assistance to their franchisees than do they do for single-unit franchises. a. Marilyn and Macy are arguing about the primary financial function of the Small Business Administration. Which one below is not one of these tried-and-true approaches for growth? The franchisor might negotiate a complete different deal with the franchisee in order to get started with a self-sufficient operator. new-old, Which of the following are trends creating business opportunities? The franchisee and franchisor are linked by a bond of voluntary cooperation rather binding contracts.
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