Potential franchisees should examine the franchisor's package and balance the cost and the _________ being offered. D. Uniform Code of Justice (UCJ) In this scenario, John is a _____. b. Which of the following is an intangible asset? Which of the following sequences indicates the path taken by these figures during the accounting process? b. price competition may affect profits. it may be purchased at a bargain price. The term "risk vs. loss" refers to the amount of return for funds invested. franchisor d. Companies that invest in small businesses. The most significant advantage for a franchisee is the increased probability of success. a. How much of successful selling consists in simply listening to the prospective buyer? The Antitrust Division of the Federal Trade Commission takes legal action against any business it believes has tried to monopolize an industry. the franchisee Which practice is a competitive concern for franchisees? can learn about the franchise from the ground up. c. Which of the following issues should detailed in the "Business Experience" section of the Uniform Franchise Offering Circular (UFOC)? A) In traditional stand-alone units b. Bill has his own tax preparation and accounting business. Frieda's Freestyle Skateboards has many customers but is not dominant in its field. d. 7-eleven Inc. The way to approach a new business venture is to think up a good or service that is unique. 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. Is usually a one-time flat fee paid by franchisees to franchisors. Entitles the franchisee the right to open a business in a given area. A) Self-reflection a. Which of the following best describes the industry she operates in? How many personnel are going to remain? Pizza Hut C. Generally, franchise marketing channels are more closely knit (i.e., closer relationships) than conventional channels. These are questions directly associated with which phase of marketing strategy for a franchise system? WebThe purchaser of a franchise is called the franchisor. c. D) Unable The franchisee is bound by the terms the franchise contract. What are they? a. Generally, the larger and more successful the franchisor, the greater the franchise fee that is charged. whichever method the franchisor deems appropriate for a their particular business. a. According to Jim Peterson, it is important to know how customers honestly perceive the quality of the product or service offered by the franchise system. The most common form of business ownership in the United States is the corporatio. a. Which one of the following tasks is not one of these six major organizational development tasks? C) Uniformity d. (Check all that apply.) Which of the following ratios would be ranked the best? 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. NOT: to generate data which can be used to accumulate working knowledge b. Mary's Models is a successful model airplane store. the franchisor When one designs a unique good or service, the individual is said to have used a(n) ____approach to starting the business. franchiser. the sales package is used by the franchisor to give a prospective franchisee a good sales presentation; the sales playbook helps the salesperson sell to customers. old-old E) Type of product. d. A major reason for success of franchising is The "________" section of the Uniform Franchise Offering Circular (UFOC) details the ancillary services that are offered by a franchisor. D. Is based on a percentage of the franchisee's gross sales. Subway All franchisees operating under single-unit franchises own and operate one unit. The elimination of time and effort associated with starting a company is an advantage of acquiring an ongoing venture. \end{aligned} Henry approaches her about operating his own business under the terms above. 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. a waiver of competition clause. Regarding the issue of control of franchisees by franchisors, which of the following is most accurate? An advantage associated with franchising is Selling supplies to the franchisee High-tech ___ entrepreneurship is exploding. 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. D) Gender Which of the following is not a key question a prospective buyer needs to ask in buying a business? 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. WebA franchise agreement granting the right to use a widely recognized product or trademark. b. d. Franchisees that create a poor brand image through bad customer service _________. B) Financing assistance B) Friends D. Number of channel members and degree of control. Which of the following processes involves interpreting a relationship between two financial figures? NOT: asset utilization for the business Service providers that wish to maintain a high degree of control over channel members are likely to use the franchise channel model. D) Quality assurance E) All of the above. Leticia would like to start a business and has investigated starting her own or buying a franchise. The ______ is a firm that originates the idea for a business and develops operational methods to run the business. 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. a. 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. Dwight has a small business and would like to sell his products overseas. All of the above, Have a seller retain a _____interest in the business. The acutal cost of "opening the doors" of a franchise establishment can be as high as $200,000. f(t)=t2t+2. Which one of the following is not one of the levels for development? Education courses franchisor. he/she is very straightforward about his/her interest, availability, and financial resources. c. Franchisors benefit from the franchise agreement because they have. success will cause another outlet to be opened nearby. Which of the following is often referred to as the franchisee's "bible"? B. B. on their support for important areas such as accounting, marketing, and training. c. In franchising, the _____ is the firm that originates the idea for a business and develops the operational methods. 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. Reno decides to purchase and operate a McDonald's restaurant. d. McDonalds is the only franchise available for ownership internationally. A) Themselves Often, strategic initiatives fail because: They are seen as extra work to be accomplished in addition to existing work. b. E. All of the above statements are true. Brent and Wendy plan to open a new business. B) Designated suppliers He wants the business to succeed. Which of the following types of financial ratios measures the ability of the franchise organization to turn sales into profits? Identify the unique aspects to purchasing an existing business. b. a. franchisee. E) Local publicity campaigns. C) Franchisees It has an established cash flow. c. A franchise system can be used for handling 1- Reduced risk of failure. Depreciation. b. As a franchisee you will benefit from the purchasing power of the franchisor to get lower costs and improved vendor service. Which of the follow statements about starting a franchise are similar to starting a business from scratch? & H_0: \sigma_1^2 \leq \sigma_2^2 \\ b. WebProbably the earliest example of franchising in the United States is most likely to be: McCormick Harvesting Machine Company. Which of the following is not a disadvantage of a major franchise? inventory turnover. The information contained in the daily business intelligence reports becomes the foundation upon which a franchise system builds what? new-old, Which of the following are trends creating business opportunities? Which of the following statements regarding the franchise fee are correct? "The Franchisor, Its Predecessors, and Affiliates" section of the UFOC _________. 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. The control issues are: 1. b. A franchisor's revenue from royalties and selling supplies provide _________ income than that earned from initial franchise fees. To increase her chances of success she should consider, buying a franchise of a well established restaurant. procedures are essentially "set in stone.". D) Unity What's the difference between the sales package and sales playbook? Solved Knowledge Check 01 Which of the following statement C) Territory Franchising is based on a system that the franchisor has already set upand it works. Thus, franchisees must comply with both the franchise agreement and the franchise operations manual to achieve a comparable level of performance. Moreover, these materials safeguard the whole 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. 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. Which franchisor manual provided by the franchisor to new franchisees is referred to as "the bible?". a. plant determining markets in a geographical area with suitable customer demographics. franchise fees c. Negotiating a deal to acquire exactly what is required from the operation. engaging in a continuous business relationship. Many franchisors require potential franchisees to work for an established franchisee for a period of time because they _________. It is always important that you weigh the advantages vs. disadvantages in purchasing a franchise. saleable value. B) In convenience stores E. The details of franchise management are vague enabling franchisees to adapt to changing environmental conditions. Anastasia has started a dry cleaning business but is having difficulties with various aspects of organizing and operating the business. a. legal and professional fees Darrel is considering expanding the business by franchising. True or false: An entrepreneur should explore what aspects of a franchisor-franchisee contract are negotiable by making a list of wants and desires. These include all of the following EXCEPT: Two primary points must be considered when a franchisor develops expansion plans for a franchise. As it pertains to the scope and importance of franchising, which of the following statements is most accurate? What is the owner's personal net worth? Changes in zoning which affect the business. c. T/F, A franchise is typically attractive because it offers training, financial assistance, and operating benefits. E. Franchisees provide significant operational assistance to franchisors. b. A) Franchise Disclosure Document The implementation of marketing mix variables in franchise channels is less fluid and flexible than in conventional channels. a. one time franchise fee and monthly royalties based on sales. C) Ensures ongoing support Which of the following activities at the franchised unit should be the center of attention? the health problems he faced as a teenager. d. new-old The owner may be in trouble with suppliers. Sarah has opened her own cosmetology business in a small shopping center with a lot of foot traffic. 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? Debt Service The difference between single-unit and multi-unit franchises is: Uniqueness in a product or service can be demonstrated through a new-new approach or a new-old approach. About how much time does it typically take in the United States to establish a business as a legal entity? When will the activities be started and completed? a. b. Who is responsible for these activities and outcomes? The "_______" section of the UFOC contains how disagreements will be resolved. all of the above. c. 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 a. 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? He is considering applying to small firms because he knows that small businesses have traditionally added _____ new jobs to the economy. d. WebWhat is usually required for a franchisor to terminate a franchise? They have heard that the disadvantages of small businesses include all of the following except. 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. Which of the following is not an ongoing cost of franchises? In the United States, ___ account(s) for 97.5 percent of all identified exporters and produce(s) 31 percent of export value. How many of the personnel will remain with the firm? Which of the following is not an advantage of a franchise? hurt not only the business at their location but also the image of other locations. True or false: A franchisor and a franchisee are both dependent on each other for success. b. Franchisees benefit from continued franchisor research and development of products and processes. B. The ___________ is a contract linking all franchisees to the franchisor. awareness of some of the unfilled promises from franchisors, Which of the following costs do not add to the cost of franchising? The ability to leave the venture if an entrepreneur does not enjoy the business is severely limited. the franchisor still maintains a great deal of control. c. The accounting records of a company are kept separate from its owners. Communications between franchisors and franchisees is one-way, performance data that flows from the franchisee to the franchisor. E) Very few franchisors do inspections. quality of the competition. And, how much will it cost to implement? Potential franchisees should evaluate franchisors' operations based __________. Suggests the franchisor provides relatively little in the way of management assistance to the franchisees. Equipment a. opening product inventory. old-old. This is the most common form of franchise channel structure. A. Portica knows the customers of her hat shop by name and knows each of their preferences. Develop strategic plans for the franchise firm. The International Franchise Association is ________. 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? d. Which of the following should the potential entrepreneur consider in developing a plan of operation? A) Fully understanding the FDD of the franchise company 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? What is a realistic number for a sample size when doing market research? 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. NOT: prospective franchises being recruited into the system. Which one of the following is NOT an advantage of franchising for the franchisee? The franchisee and franchisor are linked by a bond of voluntary cooperation rather binding contracts. The person who sells the franchise is usually required to do all of the following except: The advantages of franchising include: The franchisor owns the trademark and business model. d. Which one of the following is not one of the required factors for successful leadership? b. 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. d. T/F, The buyer of an existing business typically acquires its personnel, inventories, physical facilities, establish banking connections, and ongoing relationships with trade suppliers. B. Low expectations among franchisees Supplies B. There is one thing every franchise system knows. b. The local Small Business Administration Office The franchise with the most outlets in the United States is. d. Property, plant, and equipment is recorded at cost (minus any accumulated depreciation) Pay for all physical assets (e.g., equipment and building), needed to operate the franchise. Darrel's Donuts has been operating quite successfully for two years. NOT: customers a great source for quickly locating franchise businesses in many different industries. The individual who buys the franchise is the C. Nature of product and number of channel members Jimmy John's, Which is not a cost of franchising? According to the U.S. Census, ( ) are the fastest growing segment of small business ownership today. insurance Competitor factors in a buying decision do not include franchisette. limits placed on the franchisee regarding what it can do with the product and its production. What is the primary purpose of information systems in a start-up franchise? Maria has purchased a Subway franchise. Only franchisees operating multi-unit franchisees can own more than a single franchise.. Which of the following businesses would most likely be included in the production industry? 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. What is the name of that program? Which of the following is not included in a partnership agreement? green products On-site management In exchange for an ownership share, small businesses receive financing from a group of investors known as A. When purchasing an existing business, the prospective owner should conduct an assessment of the current group of employees. none of the above. 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? The prospective investor should get as much information as possible on the franchisor. & H_{\mathrm{a}}: \sigma_1^2>\sigma_2^2 prepaid utility bills symbols and logos. According to the SBA, in 2012 women were 51 percent of the U.S. population, and owned at least ___ percent of all small businesses. help out with financial assistance. 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. A Starbucks franchise located inside a Target store is called ___________ franchising. all of the above. The most common form of franchising today is one in whic. The Small Business Administration offers many courses to individuals interested in going into business or improving his or her business. b. The 2014 Annual Report for Murphy Oil Corporation (see www.murphyoilcorp.com) shows the following numbers of barrels of crude oil produced per day in the United States annually from 2008 through 2014: Develop a bar chart that illustrates these data. H0:1222Ha:12>22\begin{aligned} A wholesaler purchases products in quantity from _____ and then resells them to retailers. use of private labels to brand or trademark product or service. a. Jeremy has written a business plan for the business he would like to open. E. All of the above. Trade associations for the industry. control exercised by the franchisor Which of the following sequences of the three-step location model is correct? This category of information offers the distinct advantages low cost and quick availability. d. Which descriptor is not a part of the definition or franchising? d. E) None of the above is a type of franchising. b. One downside for franchisors participating in franchise channels is: a. E) Brand, Subway restaurants can be found ________. Macy because the SBA's primary financial function is to guarantee loans. My salary has remained the same for the past 7 years, but my standard of living has fallen. Richard orders some Harley-Davidson Trikes for his inventory. d. to identify factors which may pose major threats to or provide significant opportunities for the franchise system. a. Reno is a. The owner may be in trouble with suppliers. The franchisor cannot require the individual franchisee to adhere to a(n) ________. c. How many years will she have to repay the loan? goods. c. d. Attorneys and CPA firms Which of the following statements regarding what franchisors include as part of their package are correct? new-new According to the text, the most important reason why franchisors adopt franchise channels is: An agreement not to compete is also known as a. goodwill. Stuart has $50,000 to start a new business. franchisette. According to the text, which of the following is not a consideration when selecting a franchise? The potential buyer b. C) Operations About fifteen percent of all marriages in North America fail. The business that represents 99.7 percent of all employers in the United States is a. d. This program is part of the. A well-established business model Add appropriate labels. d. a. Which of the following are areas that the potential franchisee may be able to negotiate with the franchisor? inventory In product distribution franchises: all of the above, The UFOC contains how many sections: There are few resources for franchise research. d. c. Which of the following would not be a good reason to start a small business? The most important area to examine prior to purchasing a business is company profitability. c. Which of the following could he use to protect his interests?. A primary consideration for a potential franchisee is that the capital required to become a franchisee will likely be: about the same or potential more for starting a franchise business compared to starting an independent business in the same field. D. There is no difference, they are different labels for the same form of franchise channel. A. Buildings c. a. d. E. Possible high level of managerial motivation fostered by franchising. It is a channel used exclusively for distribution of consumer durable goods. b. b. The majority of small businesses are managed by, Hamilton has wanted to start a business of his own since he was a small child. Advertising The business franchise model is always an appropriate model to ensure a high degree of control, regardless of the industry. c. b. of dollars instead of units. A regular and continuous fee paid to the franchisor by the franchisee is called: d. 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. This includes all of the following except: 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. economic efficiency? Degree of control and importance of channel members Up-front capital requirements D) In military bases Business related reasons for selling do not include which of the following? equity? minority Hobby He states in the plan, "This business will serve over 400 customers by the end of the year and employ ten full-time employees." 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. C. These franchises operate in environments with little competition. Freddie's Fenders is seeking a loan from the SBA. C) Fixtures Developing a plan for the business. By immersing them in a week-long training session in an actual store, All the following explain why franchising is so widespread EXCEPT. E. All of the above statements are accurate. True. Charging for company-specific training courses and materials. Which of the following statements is true about franchising? The founding a franchise is quite ________ in form and method to creating a new business from scratch. A) Franchisor agreement C) Franchisor Disclosure Document All of these are ways a franchisor makes money; It is not uncommon for a buyer to be faced with a franchise fee of 250,000 to 1,000,000. Franchising and franchise channels continue to grow dramatically There are six major organizational development tasks required of a franchisor to develop from a single unit firm into a growing franchise system. E. Number of manufacturers in the industry. a. NOT: dealing with financial issues such as accounting and finances. b. He works many hours from January through April but in May takes a month-long vacation and the rest of the year works part-time. Start-up standards required of franchisees may include which of the following? A CPA c. What is the largest guaranteed loan she could be granted? WebWhich of the following is an advantage to purchasing a franchise?. A franchise is a business that markets a product or service developed by a franchisor, typically in the manner specified by the franchisor. Franchising and franchise channels continue to grow dramatically. if employees are leaving, will enough remain to operate the business. a. This demonstrates which advantage of a small business? C. Companies like Proctor & Gamble frequently use the franchise channel model for distribution of consumer goods. 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. "When sales continue to grow but are increasing at a decreasing rate" is associated with which stage of the product life cycle? A(n) ___________ is the firm that originates the idea for the business and develops the operations methods. A. Which of the following is NOT one of the four P's of selling? E) None of the above, All of the following are factors of franchise cost except ________. management and training. Business services. What environmental impact did European practices of land management have in Australia and New Zealand? How does Auntie Anne's ensure that new franchisees understand the company's operational approach? What pricing strategy should the firm use? The inventory should be examined for which of the following? market value. The action plan covers 3 primary areas: the owner, the finances, and other vital factors. Ellis owns a Subway franchise. amount to the government independent of his or her company name. b. 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. small businesses create cyclical unemployment, Small firms usually sell parts and assemblies to large firms because the large firms have found that, it is less expensive than making their own. new-new Which of the following statements regarding franchisors' long-term success are true? new-new, new-old payroll D) Both A and B D. Single-unit franchises enjoy a favorable image among consumers. b. C. The franchisor provides little beyond a license to use its trademarked products. c. A) Type of franchise c. This is a ___ business.
a franchisor can control all of the following except
a franchisor can control all of the following except
a franchisor can control all of the following except