Question 1

An individual who is team oriented is typically a good candidate to be a franchisee.

Accepted Answer

A) True 
 B)False

Question 2

Because franchisees put their personal capital at risk, they are highly motivated to make their franchise outlets successful. According to the textbook, this advantage of franchising a business is referred to as:

Accepted Answer

A)  franchisee owner-incentive 
B)  franchisee impulse 
C)  agency theory 
D)  institutional theory 
E)  franchisee motivation 
A)  franchisee owner-incentive 
B)  franchisee impulse 
C)  agency theory 
D)  institutional theory 
E)  franchisee motivation

Question 3

A ________ franchise is an arrangement under which the franchisor grants to the franchisee the right to buy its products and use its trade name.

Accepted Answer

A)  product and trademark 
B)  product extension 
C)  business format 
D)  production plus 
E)  business design 
A)  product and trademark 
B)  product extension 
C)  business format 
D)  production plus 
E)  business design

Question 4

Clark Jensen recently opened a Planet Smoothie franchise. So far, he is very satisfied with Planet Smoothie because in exchange for an initial franchise fee and an ongoing royalty payment, Planet Smoothie has provided Clark a formula for doing business along with training, advertising, and other forms of assistance. Clark purchased a ________ franchise.

Accepted Answer

A)  business extension 
B)  formula driven 
C)  sales extension 
D)  business format 
E)  product and trademark 
A)  business extension 
B)  formula driven 
C)  sales extension 
D)  business format 
E)  product and trademark

Question 5

Which of the following statements is incorrect regarding business format franchises?

Accepted Answer

A)  Arby's sells business format franchises. 
B)  A business format franchises can be very rigid and demanding. 
C)  Automotive services and convenience stores are well-known examples of business format franchises. 
D)  In a business format franchise, the franchisor provides a formula for doing business to the franchisee along with training and other forms of support. 
E)  The business format franchisor obtains the majority of its income from selling its products to its dealers at a markup. 
A)  Arby's sells business format franchises. 
B)  A business format franchises can be very rigid and demanding. 
C)  Automotive services and convenience stores are well-known examples of business format franchises. 
D)  In a business format franchise, the franchisor provides a formula for doing business to the franchisee along with training and other forms of support. 
E)  The business format franchisor obtains the majority of its income from selling its products to its dealers at a markup.

Question 6

The franchise agreement, or contract, is the document that consummates the sale of a franchise.

Accepted Answer

A) True 
 B)False

Question 7

List and explain three of the common misconceptions about franchising.

Accepted Answer

The answer of List and explain three of the common...

Question 8

In addition to FTC disclosure requirements, ________ states have laws providing additional protection to franchisees.

Accepted Answer

A)  6 
B)  10 
C)  15 
D)  33 
E)  47 
A)  6 
B)  10 
C)  15 
D)  33 
E)  47

Question 9

An individual who owns and operates more than one outlet of the same franchisor, whether through an area or a master franchise agreement, is referred to as a:

Accepted Answer

A)  multifaceted franchisee 
B)  super franchisee 
C)  various-unit franchisee 
D)  compound franchisee 
E)  multiple-unit franchisee 
A)  multifaceted franchisee 
B)  super franchisee 
C)  various-unit franchisee 
D)  compound franchisee 
E)  multiple-unit franchisee

Question 10

The Franchise Disclosure Document contains a total of 23 categories of information that give a prospective franchisee a broad base of information about the background and financial health of the franchisor.

Accepted Answer

A) True 
 B)False

Question 11

Phil Atkinson recently entered into an agreement with Quizno's Subs to open seven Quizno's Subs franchises. According to the agreement that Phil entered into, he has the right to open up to six Quizno's Subs franchises within the city limits of Stillwater, Oklahoma. Phil has entered into an:

Accepted Answer

A)  individual franchise agreement 
B)  area franchise agreement 
C)  locality franchise agreement 
D)  district franchise agreement 
E)  neighborhood franchise agreement 
A)  individual franchise agreement 
B)  area franchise agreement 
C)  locality franchise agreement 
D)  district franchise agreement 
E)  neighborhood franchise agreement

Question 12

Target is an example of an organization that is perfectly suited for franchising, but it doesn't franchise.

Accepted Answer

A) True 
 B)False

Question 13

The FDD contains ________ categories of information.

Accepted Answer

A)  6 
B)  18 
C)  23 
D)  32 
E)  40 
A)  6 
B)  18 
C)  23 
D)  32 
E)  40

Question 14

The royalty fees a franchisee pays are usually around 10 percent of gross income.

Accepted Answer

A) True 
 B)False

Question 15

According to the textbook, one of the first companies in the United States to utilize franchising was:

Accepted Answer

A)  McDonald's 
B)  Singer Sewing Machine 
C)  H&R Block 
D)  Coca-Cola 
E)  Curves International 
A)  McDonald's 
B)  Singer Sewing Machine 
C)  H&R Block 
D)  Coca-Cola 
E)  Curves International

An individual who is team oriented is typically a good candidate to be a franchisee.

Because franchisees put their personal capital at risk, they are highly motivated to make their franchise outlets successful. According to the textbook, this advantage of franchising a business is referred to as:

A ________ franchise is an arrangement under which the franchisor grants to the franchisee the right to buy its products and use its trade name.

Which of the following statements is incorrect regarding business format franchises?

The franchise agreement, or contract, is the document that consummates the sale of a franchise.

List and explain three of the common misconceptions about franchising.

In addition to FTC disclosure requirements, ________ states have laws providing additional protection to franchisees.

An individual who owns and operates more than one outlet of the same franchisor, whether through an area or a master franchise agreement, is referred to as a:

The Franchise Disclosure Document contains a total of 23 categories of information that give a prospective franchisee a broad base of information about the background and financial health of the franchisor.

Phil Atkinson recently entered into an agreement with Quizno's Subs to open seven Quizno's Subs franchises. According to the agreement that Phil entered into, he has the right to open up to six Quizno's Subs franchises within the city limits of Stillwater, Oklahoma. Phil has entered into an:

Target is an example of an organization that is perfectly suited for franchising, but it doesn't franchise.

The FDD contains ________ categories of information.

The royalty fees a franchisee pays are usually around 10 percent of gross income.

According to the textbook, one of the first companies in the United States to utilize franchising was:

Introduction to Entrepreneurship

Recognizing Opportunities and Generating Ideas

Feasibility Analysis

Writing a Business Plan

Industry and Competitor Analysis

Developing an Effective Business Model

Preparing the Proper Ethical and Legal Foundation

Assessing a New Venture's Financial Strength and Viability

Building a New Venture Team

Getting Financing or Funding

Unique Marketing Issues

The Importance of Intellectual Property

Preparing for and Evaluating the Challenges of Growth

Strategies for Firm Growth

Filters

Exam 15: Franchising

An individual who is team oriented is typically a good candidate to be a franchisee.

Because franchisees put their personal capital at risk, they are highly motivated to make their franchise outlets successful. According to the textbook, this advantage of franchising a business is referred to as:

A ________ franchise is an arrangement under which the franchisor grants to the franchisee the right to buy its products and use its trade name.

Which of the following statements is incorrect regarding business format franchises?

The franchise agreement, or contract, is the document that consummates the sale of a franchise.

List and explain three of the common misconceptions about franchising.

In addition to FTC disclosure requirements, ________ states have laws providing additional protection to franchisees.

An individual who owns and operates more than one outlet of the same franchisor, whether through an area or a master franchise agreement, is referred to as a:

The Franchise Disclosure Document contains a total of 23 categories of information that give a prospective franchisee a broad base of information about the background and financial health of the franchisor.

Phil Atkinson recently entered into an agreement with Quizno's Subs to open seven Quizno's Subs franchises. According to the agreement that Phil entered into, he has the right to open up to six Quizno's Subs franchises within the city limits of Stillwater, Oklahoma. Phil has entered into an:

Target is an example of an organization that is perfectly suited for franchising, but it doesn't franchise.

The FDD contains ________ categories of information.

The royalty fees a franchisee pays are usually around 10 percent of gross income.

According to the textbook, one of the first companies in the United States to utilize franchising was:

Introduction to Entrepreneurship

Recognizing Opportunities and Generating Ideas

Feasibility Analysis

Writing a Business Plan

Industry and Competitor Analysis

Developing an Effective Business Model

Preparing the Proper Ethical and Legal Foundation

Assessing a New Venture's Financial Strength and Viability

Building a New Venture Team

Getting Financing or Funding

Unique Marketing Issues

The Importance of Intellectual Property

Preparing for and Evaluating the Challenges of Growth

Strategies for Firm Growth

Filters