franchisor Which of the following is not a type of franchising according to the text? c. E) All of the above. Which of the following is true regarding inspections conducted by franchisors? all of these are reasons it could be beneficial. test review chapter 7 Flashcards | Quizlet c. Subway a. Which one of the following is not part of a franchise business arrangement? It takes special knowledge and skills to conduct an effective turnaround. Darrel's Donuts has been operating quite successfully for two years. payment of a fee. c. a. Which of the following should the potential entrepreneur consider in developing a plan of operation? D. Usage tax. a. the franchisee's revenue stream is fairly consistent because franchisers pay fixed fees and C) Territory D. There is no difference, they are different labels for the same form of franchise channel. This means that it is a riskier purchase than the purchase of a franchise. The franchisor owns the trademark and business model. All of the above. Which of the following issues should detailed in the "Business Experience" section of the Uniform Franchise Offering Circular (UFOC)? Sarah has opened her own cosmetology business in a small shopping center with a lot of foot traffic. C) Years of experience What is the name of that program? 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. Brent and Wendy plan to open a new business. a. Property, plant, and equipment is recorded at cost (minus any accumulated depreciation) buying a new business John, an entrepreneur, approaches the firm with a proposal. 3- Customers already know you exist. majority asset pricing. According to the SBA, in 2012 women were 51 percent of the U.S. population, and owned at least ___ percent of all small businesses. Small businesses have an advantage over large businesses in all of the following areas except, Jimmy and Henry are considering opening a smoke shop. 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. c. d. The product quality is within the perception of the customer and is greatly influenced by the franchise system's server. the franchisor offering a standard,well-known product or service. What Should the Franchisor Control? - Franchise Law, Disputes The most common form of business ownership in the United States is the corporatio. Which is the most important and why? A. a. Low expectations among franchisees NOT: it sometimes develops an imprecise picture of the franchise. Which characteristic is not considered a positive of franchising? These include all of the following EXCEPT: Two primary points must be considered when a franchisor develops expansion plans for a franchise. D. Reduce uncertainty A franchise system can be used for handling Which of the following is a true statement pertaining to single-unit franchises? D) Be proven c. c. B) Business-format franchising c. The Small Business Administration offers many courses to individuals interested in going into business or improving his or her business. Identify the unique aspects to purchasing an existing business. You stop by a Carl's Jr. fast food restaurant and notice that they also have Green Burrito Mexican food. C. Nature of product and number of channel members Supplier Control. Which of the following statements most accurately describes the success rate of franchises? This includes all of the following except: Franchisors capitalizing or financing their businesses are generally required to disclose three key financial statements. 3 reasons for buying an existing business. The franchisee's responsibilities include: Selling a franchise to the franchisee Externally dedicated to the market, yet internally focused on production, seeking to produce high-volume or high-value product/service while carefully examining any new opportunities for costs/benefits in relation to known strengths of the firm, is a description of which one of the market-focused business strategies identified below. Which of the follow statements about starting a franchise are similar to starting a business from scratch? b. What advantage of a small business does Bill enjoy? disagreements between the two parties have increased and contract disputes are causing many lawsuits. c. A) Success B) Eases the issues of start-up development B) Franchisee Disclosure Document The founding a franchise is quite ________ in form and method to creating a new business from scratch. all of the above. Often, strategic initiatives fail because: They are seen as extra work to be accomplished in addition to existing work. Changes in leasehold conditions. D) Quality assurance Which philosophy of expansion is, as a rule, the best method for franchisors? Degree of control and importance of channel members d. Add appropriate labels. new-new, new-old B. Royalty agreement A franchisee generally receives which of the following when purchasing a business? inventory c. c. Which descriptor is not a part of the definition or franchising? He states in the plan, "This business will serve over 400 customers by the end of the year and employ ten full-time employees." Chapter 14- Franchising and Purchasing an Existing Business Entrepreneurs tend to work harder and take moderately greater risks than persons working as employees in someone else's firm. Which one of the following is NOT an advantage of franchising for the franchisee? E) All of the above, Franchisors are ________ to provide operating manuals and training to their franchisees, which are a valuable resource for success. Communications between franchisors and franchisees is one-way, performance data that flows from the franchisee to the franchisor. The International Franchise Association is ________. market value. The potential buyer ENT 3172 Chapter 1-12 Terms Flashcards | Quizlet The business that represents 99.7 percent of all employers in the United States is a. must be provided to the potential franchisee early in the process. 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? b. d. When buying a small business you need to know all of the following items except: WebFrianchisees are likely to be more successful when the franchisor provides high-quality products and helps with finding locations. C) Penalty This company could also be referred to a. Samantha would like to own her own business but doesn't want to start it from scratch. T/F, The buyer of an existing business typically acquires its personnel, inventories, physical facilities, establish banking connections, and ongoing relationships with trade suppliers. Do you think this was a popular tax? The ability to leave the venture if an entrepreneur does not enjoy the business is severely limited. Regarding the issue of control of franchisees by franchisors, which of the following is most accurate? B) Advertising and promotion There is an established set of process. 7-eleven Inc. Marilyn argues that the SBA's primary function is to lend money. The number of jobs provided by franchised businesses is slightly less than those provided by durable goods manufacturing. d. D) Gender 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. E) None of the above is an exception. a. The advantages of franchising include: Payroll tax. What is the key to convincing someone to purchase your franchise, product, or service? A wholesaler purchases products in quantity from _____ and then resells them to retailers. on their support for important areas such as accounting, marketing, and training. There are six major organizational development tasks required of a franchisor to develop from a single unit firm into a growing franchise system. Solved Knowledge Check 01 Which of the following statement d. A) Guarantees brand recognition Sylvia has an SBA-guaranteed business loan for the average life of such loans. hurt not only the business at their location but also the image of other locations. It has an established cash flow. d. The market research should be independent of the franchisor. They meet with a business planner who helps them compile a business plan. d. Which of the following types of businesses benefit from being located near competitors? Franchising offers all the following benefits for - Brainly.com proven track record. Jennifer and Raleigh are considering starting a small business and are weighing the pros and cons of doing so. a. B. b. _________ is a broad area that encompasses such things as brochures, signs, logos, televisions advertisements, newspaper, advertisements, sales techniques, adn internal business design. WebWhich of the following is an advantage to purchasing a franchise?. b. 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. It is so successful that she has decided to allow others to use her business name, materials, and methods in operating their own business for a fee. Most franchisors have a ________ page where potential franchisee can contact them for more information. b. old-old Trade associations for the industry. Which of the following helps to simplify the difficult site selection process? Richard orders some Harley-Davidson Trikes for his inventory. number of competitors. d. There are several ways to protect a trademark, as indicated below. the franchisor Changes in zoning which affect the business. B) Research a. C) Popularity D) Optimism Traits that entrepreneurs tend to have include all but which one of the following? The franchisee and franchisor are linked by a bond of voluntary cooperation rather binding contracts. What special skills does the entrepreneur have that will bring success? D. In a franchise, one party grants a license to another party to sell a trademarked product or service. Pizza Hut limits placed on the franchisee regarding what it can do with the product and its production. Mary's Models is a successful model airplane store. Which of the following is true about the serious prospective franchisee? A. b. A. A ________ specializes in selling buinesses. An advantage associated with franchising is location of the competition. Depreciation. How long has a franchisor been in the business? The franchisor cannot require the individual franchisee to adhere to a(n) ________. A leading apparel manufacturing firm in the United States invites applications to establish franchises in Texas. Which of the following activities at the franchised unit should be the center of attention? The franchisee is bound by the terms the franchise contract. opportunitites. These are questions directly associated with which phase of marketing strategy for a franchise system? What is the effect of such a tax on Which one of the following is not one of the required factors for successful leadership? How is buying an existing business not like purchasing a franchise? b. C) In shopping malls B) Marketing A trial period of at least 3 years C. Court permission D. Notice to the 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. b. Prior job All of the above. C. Generally, franchise marketing channels are more closely knit (i.e., closer relationships) than conventional channels. How does Auntie Anne's ensure that new franchisees understand the company's operational approach? Any cost saving resulting from franchisee purchasing power helps to offset other costs, such as franchise ________. Operational Control. Which type of franchisor manual is specifically focused to this purpose? it can be either franchisor- or franchisee-driven. Chapter 4 Franchises and Buyouts Assessment Flashcards a. Pewterschmidt Company values its inventory reported in the financial statements in terms The inventory should be examined for which of the following? A. 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. 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. 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. 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? Juan is most likely a franchisee in the ___ industry. Financial control procedures Which of the following are resources that an entrepreneur can typically use to find a business for sale? WebStudy with Quizlet and memorize flashcards containing terms like All of the following are a new type of franchising opportunity except, Any costing saving resulting from franchises The first step for the franchisor to do is: contact and listen to each franchisee as possible, to determine what are the problems to be addressed. Business situations that are appropriate to consider when looking for growth through franchising include all but which one of the following? old-new The franchisor provides a system for the franchisee to operate the business. In 2016, the International Franchise Association reported that franchises in the United States (US) provided nearly ______ direct jobs. a. True or false: One advantage of buying an existing business instead of a franchise is that an existing business already has an established cash flow. opening product inventory. This is the most common form of franchise channel structure. D) Both A and B C. While the number of franchises has grown, the number of kinds of franchises has remained constant new-old. Which of the following sequences indicates the path taken by these figures during the accounting process? This category of information offers the distinct advantages low cost and quick availability. a financial investment. 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. franchisette. "When sales continue to grow but are increasing at a decreasing rate" is associated with which stage of the product life cycle? NOT: Multi-unit Franchisee. b. D. Uniform Code of Justice (UCJ) a. The initial franchisee vetting usually includes _________. c. By immersing them in a week-long training session in an actual store, All the following explain why franchising is so widespread EXCEPT. The _____approach indicates the importance of people's awareness of their daily lives for developing new business ideas. The implementation of marketing mix variables in franchise channels is less fluid and flexible than in conventional channels. Which of the following organizations would most likely give her the help she needs? provide professional management training to the unit's staff. invest money in the operation. An individual looking to buy a franchise should _________. To increase her chances of success she should consider, buying a franchise of a well established restaurant. insurance Are You Still a Franchisee When the Franchisor Controls Everything? One downside for franchisors participating in franchise channels is: Which of the following are ways in which a franchisor earns profits? In a franchise, two parties are involved, the franchisee and franchisor. Which is not a start-up expense? Which of the following are benefits of purchasing an existing business? new-old, old-new, Starting a business by adapting something already on the market is called what approach? he/she is very straightforward about his/her interest, availability, and financial resources. This is an example o. Craig has $60,000 to invest in a new small business. a. new-old, old-old The reason franchises have been a popular form of business is due to ___________. The Uniform Franchise Offering Circular _______. The "Restrictions on What the Franchisee May Sell" section of the UFOC describes ____________. c. C. Companies like Proctor & Gamble frequently use the franchise channel model for distribution of consumer goods. A. There are four types of growth opportunities for franchise systems to increase sales and share-of-market within their customer base. Which of the following is an advantage to purchasing a franchise?. C. Lodging. franchatter. In many instances, products or ingredients in a franchise must be purchased from ________. franchises have a very high success rate compared to other small businesses. D. Franchising is an American business model that does not work well outside the U.S. Rent instead of liquidation value. both of the above. d. b. There are few resources for franchise research. Ability to achieve a good golf score while making sales to prospective franchisees. Which of the following are areas that the potential franchisee may be able to negotiate with the franchisor? B. unscrupulous practices. C. Franchise agreement What exactly is to be done in each segment? b. A franchisor's revenue from royalties and selling supplies provide _________ income than that earned from initial franchise fees. c. the owner's reason for selling. 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. All of the following are disadvantages of franchising for the franchisee, except for: typically operate as a non-unionize business establishment. your financial backer. One of the more interesting ratios for franchising is the Location Selection Ratio or Sales/Costs ratio. E) Regret, Performing due diligence may include ________. WebAll of the following are a new type of franchising opportunity except ________. E. Possible high level of managerial motivation fostered by franchising. d. Payroll The franchisor says it has the power to control which suppliers the franchisees use due to implied powers in the franchise agreement. Franchisee operational efficiency is more important than working relationships between franchisors and franchisees c. a, b, and c only. d. The party granting the license is the. True or false: A disadvantage of buying an existing business is that operating processes and policies have already been established. f(t)=t2t+2. Short-term obligations created by the franchisee in buying supplies, materials or services associated with running the business are referred to as: Often considered the most critical financial component of working capital is, NOT: accounts receivable D) Removes the creativity and freedom A) Fully understanding the FDD of the franchise company T/F, There is no need to find out more information about a prospective franchise as the franchisor should be the primary source of information T/F, A franchising strategy whereby a single franchise owns more than one unit in a given area is typically referred to as an area developer strategy T/F, The potential value of any franchise arrangement is defined by the rights outlined in the franchise contract. The "Federal Trade Commission" does not provide information on franchise success. c. Which of the following is an advantage to the franchisee? There is a higher likelihood of success. Repeat the test using the critical value approach. As it pertains to the scope and importance of franchising, which of the following statements is most accurate? C) Purchasing power Samantha would like to get a small business loan from the SBA. The Federal Trade Commission regulates franchise. Franchise agreement usually allow the franchisee to operate the business _________. a. A) Recognition The category most franchise systems are in is the one that has focus on product or service qualities or characteristics with prices being a second-level or a lower order concern to the purchaser. 2. The "right questions" the prospective small business owner should ask about a franchise deal with Which two factors are especially relevant in the scope and frequency of franchisee evaluations by franchisors? Foundations of Business: Chapter 5 Flashcards | Quizlet Franchisors benefit from the franchise agreement because they have. c. c. 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 small businesses could be categorized as being in the distribution industry? C) Popularity a. green products pay a fee. c. In the United States, ___ account(s) for 97.5 percent of all identified exporters and produce(s) 31 percent of export value. What is the largest guaranteed loan she could be granted? Franchisors must have a high-quality support The Clayton Act makes it illegal for competitors to get together and set prices on the products or services they sell. CHAPTER 2 Flashcards | Quizlet A) Accounting A significant amount of up-front cash is required to begin operations. A. Business related reasons for selling do not include which of the following?
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