a franchisor can control all of the following except
B) Contractual obligations The term "risk vs. loss" refers to the amount of return for funds invested. A) Fully understanding the FDD of the franchise company The market research should be independent of the franchisor. a. new-new When will the activities be started and completed? E) All of the above, The formula provided by the franchise does which of the following? A. The ability to leave the venture if an entrepreneur does not enjoy the business is severely limited. Samantha would like to get a small business loan from the SBA. B. A) Product and trade-name franchising Which of the following are ways in which a franchisor earns profits? Sarah has opened her own cosmetology business in a small shopping center with a lot of foot traffic. Which of the following statement most accurately describes a franchise channel? B) Positive relationships with their franchisees This is the most common form of franchise channel structure. old-old The primary administrative costs of administering a franchise program typically include those of: hiring and training salespeople to recruit or solicit prospective franchisees, The recruitment package is part of the franchisor's, initial response to a potential franchisee's inquiry for information about the franchise, The written information provided in the franchise package to a prospective franchisee contains, promotions package and operations materials. Property, plant, and equipment is recorded at cost (minus any accumulated depreciation) Which of the following statements are relevant to the definition of, "franchise"? b. Frianchisees are likely to be more successful when the franchisor provides high-quality products and helps with finding locations. new-new, new-old NOT: marketing and advertising to customers Godfrey has just graduated from business school and is seeking employment. A. Payroll Franchisees have the option of using the logo and symbols of the franchisor. a. b. A) Success c. You stop by a Carl's Jr. fast food restaurant and notice that they also have Green Burrito Mexican food. His actions are possible because small businesses. Which of the following is often referred to as the franchisee's "bible"? Which of the following organizations can assist him? B. company name. A. Compensate the franchisee for the use of its trademark. Subway When buying a business, you should do all of the following except, A corporation's senior officers decide how much should be paid out in dividends. How many personnel are going to remain? What factor generally determines which co-branding method is chosen by a franchisor? the franchisor still maintains a great deal of control. franchatter. Which one of the following is not part of a franchise business arrangement? The most important area to examine prior to purchasing a business is company profitability. He states in the plan, "This business will serve over 400 customers by the end of the year and employ ten full-time employees." Franchisees that create a poor brand image through bad customer service _________. d. 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. c. 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. This means that it is a riskier purchase than the purchase of a franchise. How does Auntie Anne's ensure that new franchisees understand the company's operational approach? Darrel's Donuts has been operating quite successfully for two years. A) Established multiple franchises d. E. Number of manufacturers in the industry. D. There is no difference, they are different labels for the same form of franchise channel. c. c. asset pricing. Does a physical count correspond with the book count? C) Penalty If you decide to purchase a franchise, you will have to pay. new-old. What is the primary disadvantage of owning a franchise experienced by a franchisee? 9 2. Develop strategic plans for the franchise firm. c. E. All of the above are about equal. Why is the business being sold? Which two factors are especially relevant in the scope and frequency of franchisee evaluations by franchisors? Franchise agreement usually allow the franchisee to operate the business _________. Which is not a key question to ask when buying a business? c. b. Which of the following laws requires lenders to inform consumers about all costs of credit before an agreement is signed? c. d. The accountant assigns revenues and expenses to specific years before preparing the financial statements. Do you think this was a popular tax? Is usually a one-time flat fee paid by franchisees to franchisors. The _________ has the responsibility for the business location, of establishing the business, and of building the storefront. Only franchisees operating multi-unit franchisees can own more than a single franchise.. 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. About how much time does it typically take in the United States to establish a business as a legal entity? equipment. A) Self-reflection b. 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. c. _________ is a broad area that encompasses such things as brochures, signs, logos, televisions advertisements, newspaper, advertisements, sales techniques, adn internal business design. Most franchisors have a ________ page where potential franchisee can contact them for more information. Generally, franchise marketing channels are more closely knit (i.e., closer relationships) than conventional channels. track record of the franchisor d. Organization the process of change within the business The attitude of the customer is made up of three key factors. Which one of the following is not one of the levels for development? B) In convenience stores WebThe Federal Trade Commission monitors all of the following activities except the sale of unhealthful foods The Franchise Disclosure Document helps the franchise buyer to make Uniform Franchise Offering Circular (UFOC) limits placed on the franchisee regarding what it can do with the product and its production. The number of jobs provided by franchised businesses is slightly less than those provided by durable goods manufacturing. Which of the following things is NOT true about the accounting process? all of the above, The UFOC contains how many sections: Uniqueness in a product or service can be demonstrated through a new-new approach or a new-old approach. Henry approaches her about operating his own business under the terms above. Which of the following is not an advantage of a franchise? 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. b. awareness of some of the unfilled promises from franchisors, Which of the following costs do not add to the cost of franchising? WebWhich of the following is an advantage to purchasing a franchise?. What are they? a. Which practice is a competitive concern for franchisees? b. Why might co-branding be beneficial for a mature market? Master franchises do not allow individuals and organizations to buy the right to subfranchise within a delineated geographic territory. E) None of the above is an exception. amount to the government independent of his or her Is the building heated with gas or electric? For Jerry's Automobile Parts Fabricating business to qualify as a small business, it can employ no more than ___ people. the franchisor Franchisors must have a high-quality support E) Type of product. True or false: A disadvantage of buying an existing business is that operating processes and policies have already been established. Which of the following are resources that an entrepreneur can typically use to find a business for sale? How much of successful selling consists in simply listening to the prospective buyer? How long has a franchisor been in the business? The owner may be in trouble with suppliers. In what way is a franchise's control over the business greatly reduced? new-new The "right questions" the prospective small business owner should ask about a franchise deal with A) They may be announced or unannounced. 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. The information contained in the daily business intelligence reports becomes the foundation upon which a franchise system builds what? Entrepreneurs tend to work harder and take moderately greater risks than persons working as employees in someone else's firm. collaboration with suppliers through Internet, NOT: franchisors Franchisees may pay a fee that is separate from the royalty fee, often called a ________, to contribute to a shared advertising fund. Because of disputes between franchisors and franchisees, a program was instituted to arbitrate them. d. They meet with a business planner who helps them compile a business plan. Pay for all physical assets (e.g., equipment and building), needed to operate the franchise. The extra value a business can command in a sale is known as A Starbucks franchise located inside a Target store is called ___________ franchising. E) All of the above, The term "FDD" stands for which of the following? 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? It is uncommon for a franchisor to handle the national and regional media purchasing for a franchisee. Matilda would like to open an ice cream and sweet treats store but she will need a loan to do so. Ability to achieve a good golf score while making sales to prospective franchisees. E) All of the above. and D. Franchisors spend billions of dollars annually to keep franchisees trained. legal and professional fees A franchisee that has inconsistent quality or service not only hurts his or her own business but also impacts the brand images of all the other franchisees. goodwill. A) The franchisor 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. Which major question in his business plan does this statement address? Rent Increased management flexibility b. Negotiating a deal to acquire exactly what is required from the operation. 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? It has an established cash flow. c. b. The Small Business Administration offers many courses to individuals interested in going into business or improving his or her business. Which of the following activities at the franchisor's headquarters office should be the center of attention? E. Franchisees provide significant operational assistance to franchisors. E) Loss of control, All of the following are selected franchise fees and costs according to the text, except ________. Which one of the following is not a major question at the onset? c. he can ensure that the new stores are operated according to his own standards through the franchise agreement. of dollars instead of units. Terry's is a. Characteristics of a small business would include all of the following except. Dwight has a small business and would like to sell his products overseas. a. c. If a franchise system is struggling, not achieving long-term success. B. D. Real estate. b. d. B. The "Trademarks" section of the UFOC details ___________. a. Fran's Fancy Frocks, a retail clothing store, may not exceed ___ in annual sales to qualify as a small business. disagreements between the two parties have increased and contract disputes are causing many lawsuits. He wants the business to succeed. b. d. Portica knows the customers of her hat shop by name and knows each of their preferences. Sales tax. Potential franchisees should evaluate franchisors' operations based __________. b. A regular and continuous fee paid to the franchisor by the franchisee is called: E) None of the above, Franchisors are focused on creating wealth for ________. A significant amount of up-front cash is required to begin operations. On-site management In exchange for an ownership share, small businesses receive financing from a group of investors known as B. E. Is a government tax to register the franchise. a. Find all vertical and horizontal asymptotes of the graph of the given function. The difference between single-unit and multi-unit franchises is: d. 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. d. D) Doing Internet research d. Which of the following activities at the franchised unit should be the center of attention? process for expanding a business or service through licensing arrangement. A CPA "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. 1- Reduced risk of failure. 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. Sales records are of very little value to a buyer in evaluating a company's worth. Ellis owns a Subway franchise. prepaid utility bills C) Years of experience The business that represents 99.7 percent of all employers in the United States is a. A. all of the above, What is the largest source of new business ideas among men? a. Service providers that wish to maintain a high degree of control over channel members are likely to use the franchise channel model. d. c. Franchising and franchise channels continue to grow dramatically 5-age. The way to approach a new business venture is to think up a good or service that is unique. all of these are reasons it could be beneficial. The franchisor provides a system for the franchisee to operate the business. Selling supplies to the franchisee 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. The person who gets the franchise is usually required to do all of the following except: There are several ways to protect a trademark, as indicated below. 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. This demonstrates which advantage of a small business? B. risk versus reward. D) It is unlawful to do such inspections. What is the first step to good site selection? new-new, old-old 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. Sound franchisors provide a significant quantity and excellent quality of start-up assistance to new franchisees, as well as ongoing education and support for established ones. b. c. Richard has a motorcycle and ATV store. all of the above. E. None of the above. About fifteen percent of all marriages in North America fail. Which of the following is not a disadvantage of a major franchise? The most common form of business ownership in the United States is the corporatio. WebProbably the earliest example of franchising in the United States is most likely to be: McCormick Harvesting Machine Company. SCORE is a group of retired businesspeople who volunteer their services to small business through the SBA. invest money in the operation. the owner's reason for selling. Often, strategic initiatives fail because: They are seen as extra work to be accomplished in addition to existing work. Start-up standards required of franchisees may include which of the following? B) Consistency All of the following are a new type of franchising opportunity except, Any costing saving resulting from franchises purchasing power helps to offset other costs , such as franchise, Start - Up Standard require of franchisees may include which of the following, Products and service in a franchise may not be altered, added, or dropped without, in many instances, products or ingredients in a franchise must be purchased from, As a franchise one will benefits from the purchasing power of the franchisor to get, a provide a significant advantage for a business start-up, all of the following are advantages of franching except, all of the following are selected franchise fee and cost accrording to the text except, Franchisors are to provide operations manuals and training to their franchisees , which are valuable resource for success, Fundamentals of Financial Management, Concise Edition, Daniel F Viele, David H Marshall, Wayne W McManus, Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield. a. minority The planner will want to find the answers to all of the following questions except. franchisette. D) Unable The person who sells the franchise is usually required to do all of the following except: a financial investment. Which of the following is not a key question a prospective buyer needs to ask in buying a business? loss of freedom and control as franchise system grows. d. b. determines the salaries of the corporation's officers. if employees are leaving, will enough remain to operate the business. 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. all of the above. d. machinery. Compared to other types of businesses, the failure rate for franchises is __________. a. C. Companies like Proctor & Gamble frequently use the franchise channel model for distribution of consumer goods. C. These franchises operate in environments with little competition. Which of the following is Untrue about the policies and procedures of a franchise system? Business format franchises are prevalent in which of the following businesses? D) In military bases NOT: prospective franchises being recruited into the system. This is an example o. Craig has $60,000 to invest in a new small business. 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. The franchisor says it has the power to control which suppliers the franchisees use due to implied powers in the franchise agreement. T/F, Franchising is a two-party legal agreement whereby a franchisor is granted the privilege to conduct business as an individual owner according to the methods and terms specified by the franchisee. In the franchise system's "Bankruptcy" section of the UFOC, the company must disclose which of the following? Brenda has a small grocery store in a residential neighborhood where she primarily sells staples to the people who live in the area. the ability to build personal relationships with the owners and other employees. Business situations that are appropriate to consider when looking for growth through franchising include all but which one of the following? A franchise is a business that markets a product or service developed by a franchisor, typically in the manner specified by the franchisor. a. Buildings What's the difference between the sales package and sales playbook? What type of competition exists? 23 c. The Uniform Franchise Offering Circular _______. opportunitites. Up-front capital requirements 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. C) Never provide help for start-up 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. planning, persistence, patience, people, profit (pg 136) what are the 3 B) Failure d. One of the more interesting ratios for franchising is the Location Selection Ratio or Sales/Costs ratio. a. What is the primary purpose of information systems in a mid-size franchise? Changes in leasehold conditions. The product quality is within the perception of the customer and is greatly influenced by the franchise system's server. d. D. Limited independence of the franchisee. 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. a. Franchises include the business name and a general plan for business operations. a. the competition in the area. Fundamentals of Financial Management, Concise Edition, Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield, Marketing Essentials: The Deca Connection, Carl A. Woloszyk, Grady Kimbrell, Lois Schneider Farese. Four factors are important in determining the size and shape of a primary service area (PSA). The costs of franchises vary significantly. The inventory should be examined for which of the following? A franchisee generally receives which of the following when purchasing a business? b. d. age of the competition's owners. a. c. When buying a business, competition must be investigated because 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. 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 Repeat the test using the critical value approach. D) Data regarding existing units D) Removes the creativity and freedom b. old-old procedures are essentially "set in stone.". The "Federal Trade Commission" does not provide information on franchise success. The Franchise Disclosure Document helps the franchise buyer to make a knowledgeable purchase. Which of the following is true of the risk involved in buying an existing business facing bankruptcy? NOT: customers a. Degree of control and importance of channel members. H0:1222Ha:12>22. B. The franchisor licenses its trademarked products to franchisees. According to the SBA, in 2012 women were 51 percent of the U.S. population, and owned at least ___ percent of all small businesses. As a class assignment, business students were told to prepare a business plan for a business they would like to own. 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. 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.
