Exam 6: Franchising and the Entrepreneur

One of the best ways for an entrepreneur to evaluate a potential franchiser is to interview several franchise owners who have been in business at least one year.

To make a successful franchise operation,an entrepreneur's business model must be replicable.

A significant growth area in franchising is providing time-saving services to baby boomers.

In view of the cause of most new business failures,probably the most valuable service provided franchisees by the franchiser is:

Typically,because the franchisor's attorney prepares franchise contracts,the provision favors the franchisee.

As with most franchises,the key to H&R Block's success is the standardization of their product,processes,etc.

Which of the following should make a potential franchisee suspicious about a franchiser's honesty?

Franchisors are obligated to renew a franchisee's contract unless there has been malfeasance on the part of the franchise.

According to the Trade Regulation Rule,every franchisor must provide detailed information on their operations at the first personal contact,or at least 14 days before a franchise contract is signed.

A significant advantage a franchisee has over the independent small business owner is participation in the franchiser's ________.

Most franchisers provide extensive financial help like loans and low-rate financing for their franchises.

Another term for cobranding franchising is:

Explain the benefits of franchising to the franchisee.

The law requires franchisors to register a Franchise Disclosure Document (FDD)and deliver a copy to prospective franchisees after the sale of a franchise.

What characteristics do franchisees look for in a "good franchise"?

A multi-unit franchise gives the franchisee the right to open more than one franchise outlet in a territory within a specific time frame.

Franchisees generally sell only those products or services that the franchiser has approved but may sell complementary products as long as they aren't a second competing franchise.

When franchisees purchase their franchises and sign the contract,they agree to sell the franchisor's product or service by following its prescribed formula.

When it comes to financial assistance for franchisees,the franchiser often:

Do not heed any information gathered from past franchisees,because they will distort the reasons why they left the franchise.