Question 1

According to the textbook, from the franchisor's point of view, the primary disadvantage of franchising is that ________.

Accepted Answer

A)  it is a poorly understood form of business ownership 
B)  an organization allows others to profit from its trademark and business method 
C)  franchise organizations consistently make less money than alternative forms of business ownership 
D)  it typically takes longer to grow an organization via franchising than company-owned stores 
E)  it is not legal in seven states and the District of Columbia 
A)  it is a poorly understood form of business ownership 
B)  an organization allows others to profit from its trademark and business method 
C)  franchise organizations consistently make less money than alternative forms of business ownership 
D)  it typically takes longer to grow an organization via franchising than company-owned stores 
E)  it is not legal in seven states and the District of Columbia

Question 2

While franchise agreements vary, each agreement typically contains these sections: the ________ agreement and the ________ agreement.

Accepted Answer

A)  statutory; purchase 
B)  franchise; buy 
C)  buy; membership 
D)  procurement; statutory 
E)  purchase; franchise 
A)  statutory; purchase 
B)  franchise; buy 
C)  buy; membership 
D)  procurement; statutory 
E)  purchase; franchise

Question 3

What are the primary advantages and disadvantages to establishing a franchise system (from the franchisor's point of view)?

Accepted Answer

There are two primary advantages to fran

Question 4

According to the textbook, the main disadvantage of buying a franchise is ________.

Accepted Answer

A)  franchise organizations typically grow slower than non-franchise organizations in the same industry 
B)  franchisors typically provide poor levels of support 
C)  the cost involved 
D)  the service sector of the U.S. economy is waning in importance 
E)  franchising is waning in its popularity 
A)  franchise organizations typically grow slower than non-franchise organizations in the same industry 
B)  franchisors typically provide poor levels of support 
C)  the cost involved 
D)  the service sector of the U.S. economy is waning in importance 
E)  franchising is waning in its popularity

Question 5

A Pepsi Cola bottling dealership is an example of a business format franchise.

Accepted Answer

A) True 
 B)False

Question 6

Jim Pierce just purchased the rights to develop multiple School of Rock franchises in Germany. Jim just purchased a(n) ________ franchise arrangement.

Accepted Answer

A)  concurrent 
B)  indirect 
C)  lateral 
D)  direct 
E)  subordinate 
A)  concurrent 
B)  indirect 
C)  lateral 
D)  direct 
E)  subordinate

Question 7

In the majority of cases, a franchisee pays a royalty based on a percentage of weekly or monthly net income.

Accepted Answer

A) True 
 B)False

Question 8

According to the textbook, a franchisee's weekly or monthly royalty fees are typically around ________ to ________ percent of gross income.

Accepted Answer

A)  1; 2 
B)  2; 3 
C)  3; 4 
D)  4; 5 
E)  5; 6 
A)  1; 2 
B)  2; 3 
C)  3; 4 
D)  4; 5 
E)  5; 6

Question 9

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 10

One of the most important questions a prospective franchisor should consider is whether the fees and royalties charged by a franchisor are consistent with the franchise's value or worth.

Accepted Answer

A) True 
 B)False

Question 11

How can a person tell if franchising is right for them?

Accepted Answer

Purchasing a franchise should be weighed

Question 12

Which of the following companies is suitable for franchising?

Accepted Answer

A)  Home Depot 
B)  Dropbox 
C)  Qdoba Mexican Grill 
D)  Walmart 
E)  GoPro 
A)  Home Depot 
B)  Dropbox 
C)  Qdoba Mexican Grill 
D)  Walmart 
E)  GoPro

Question 13

A management concept called agency theory refutes the value of franchising for organizations with multiple units, like restaurant chains.

Accepted Answer

A) True 
 B)False

Question 14

The Partnering for Success feature in Chapter 15 focuses on how franchise organizations can boost their sales while at the same time reduce their expenses. The technique that the feature recommends to achieve these dual objectives is ________.

Accepted Answer

A)  strategic alliances 
B)  joint ventures 
C)  outsourcing 
D)  licensing 
E)  co-branding 
A)  strategic alliances 
B)  joint ventures 
C)  outsourcing 
D)  licensing 
E)  co-branding

Question 15

According to the textbook, which of the following is not a cost that is typically associated with buying a franchise?

Accepted Answer

A)  Advertising fees 
B)  Continuing royalty payments 
C)  Trademark acquisition fee 
D)  Initial franchise fee 
E)  Capital requirements 
A)  Advertising fees 
B)  Continuing royalty payments 
C)  Trademark acquisition fee 
D)  Initial franchise fee 
E)  Capital requirements

According to the textbook, from the franchisor's point of view, the primary disadvantage of franchising is that ________.

While franchise agreements vary, each agreement typically contains these sections: the agreement and the agreement.

What are the primary advantages and disadvantages to establishing a franchise system (from the franchisor's point of view)?

According to the textbook, the main disadvantage of buying a franchise is ________.

A Pepsi Cola bottling dealership is an example of a business format franchise.

Jim Pierce just purchased the rights to develop multiple School of Rock franchises in Germany. Jim just purchased a(n) ________ franchise arrangement.

In the majority of cases, a franchisee pays a royalty based on a percentage of weekly or monthly net income.

According to the textbook, a franchisee's weekly or monthly royalty fees are typically around to percent of gross income.

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

One of the most important questions a prospective franchisor should consider is whether the fees and royalties charged by a franchisor are consistent with the franchise's value or worth.

How can a person tell if franchising is right for them?

Which of the following companies is suitable for franchising?

A management concept called agency theory refutes the value of franchising for organizations with multiple units, like restaurant chains.

The Partnering for Success feature in Chapter 15 focuses on how franchise organizations can boost their sales while at the same time reduce their expenses. The technique that the feature recommends to achieve these dual objectives is ________.

According to the textbook, which of the following is not a cost that is typically associated with buying a franchise?

Introduction to Entrepreneurship

Recognizing Opportunities and Generating Ideas

Feasibility Analysis

Developing an Effective Business Model

Industry and Competitor Analysis

Writing a Business Plan

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

According to the textbook, from the franchisor's point of view, the primary disadvantage of franchising is that ________.

While franchise agreements vary, each agreement typically contains these sections: the ________ agreement and the ________ agreement.

What are the primary advantages and disadvantages to establishing a franchise system (from the franchisor's point of view)?

According to the textbook, the main disadvantage of buying a franchise is ________.

A Pepsi Cola bottling dealership is an example of a business format franchise.

Jim Pierce just purchased the rights to develop multiple School of Rock franchises in Germany. Jim just purchased a(n) ________ franchise arrangement.

In the majority of cases, a franchisee pays a royalty based on a percentage of weekly or monthly net income.

According to the textbook, a franchisee's weekly or monthly royalty fees are typically around ________ to ________ percent of gross income.

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

One of the most important questions a prospective franchisor should consider is whether the fees and royalties charged by a franchisor are consistent with the franchise's value or worth.

How can a person tell if franchising is right for them?

Which of the following companies is suitable for franchising?

A management concept called agency theory refutes the value of franchising for organizations with multiple units, like restaurant chains.

The Partnering for Success feature in Chapter 15 focuses on how franchise organizations can boost their sales while at the same time reduce their expenses. The technique that the feature recommends to achieve these dual objectives is ________.

According to the textbook, which of the following is not a cost that is typically associated with buying a franchise?

Introduction to Entrepreneurship

Recognizing Opportunities and Generating Ideas

Feasibility Analysis

Developing an Effective Business Model

Industry and Competitor Analysis

Writing a Business Plan

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

While franchise agreements vary, each agreement typically contains these sections: the agreement and the agreement.

According to the textbook, a franchisee's weekly or monthly royalty fees are typically around to percent of gross income.