Question 1

Typically,the franchiser controls are very tight on what the franchisee:

Accepted Answer

A) does in terms of who they hire as employees. 
B) sets in terms of retail pricing and hours of operation. 
C) does with his/her net profits after fees and taxes are paid. 
D) sells in terms of the product or service they offer. 
A) does in terms of who they hire as employees. 
B) sets in terms of retail pricing and hours of operation. 
C) does with his/her net profits after fees and taxes are paid. 
D) sells in terms of the product or service they offer.

Question 2

Territorial encroachment is becoming a hotly contested issue as franchisers have nearly exhausted prime locations for franchises.

Accepted Answer

A) True 
 B)False

Question 3

Which of the following is an indication of a dishonest franchiser?

Accepted Answer

A) Very thorough and complete operations and training manuals 
B) Recommending retail prices and providing a list of "approved" suppliers of products and materials needed for running the franchise 
C) Attempts to discourage you from allowing an attorney to evaluate the franchise contract 
D) Not providing a set of detailed earnings projections for each potential franchisee 
A) Very thorough and complete operations and training manuals 
B) Recommending retail prices and providing a list of "approved" suppliers of products and materials needed for running the franchise 
C) Attempts to discourage you from allowing an attorney to evaluate the franchise contract 
D) Not providing a set of detailed earnings projections for each potential franchisee

Question 4

In most cases,startup costs for franchises often do not include any additional fees.

Accepted Answer

A) True 
 B)False

Question 5

McDonald's relies almost exclusively on the trade name type of franchising.

Accepted Answer

A) True 
 B)False

Question 6

When evaluating a franchise,the potential franchisee should:

Accepted Answer

A) interview both current and former franchisees. 
B) only interview franchise employees as franchisees vary greatly in their opinions. 
C) ask about what oral promises the franchiser will give regarding future earnings. 
D) look at the local labor market to see if there is a pool of appropriate candidates for employment. 
A) interview both current and former franchisees. 
B) only interview franchise employees as franchisees vary greatly in their opinions. 
C) ask about what oral promises the franchiser will give regarding future earnings. 
D) look at the local labor market to see if there is a pool of appropriate candidates for employment.

Question 7

The primary market for U.S.franchisors is Europe.

Accepted Answer

A) True 
 B)False

Question 8

The only fee that franchisers can collect from franchisees is a one-time franchise fee paid at the outset of the relationship.

Accepted Answer

A) True 
 B)False

Question 9

By the 1920s,franchising was rife with fraudulent practitioners.

Accepted Answer

A) True 
 B)False

Question 10

The primary advantage of buying a franchise over starting your own company is:

Accepted Answer

A) in the purchase of the franchiser's experience,expertise,and products. 
B) the fact it is much less expensive than doing your own business start-up. 
C) the extensive assistance offered in finding start-up capital. 
D) the absolute territory protection offered by all franchisers. 
A) in the purchase of the franchiser's experience,expertise,and products. 
B) the fact it is much less expensive than doing your own business start-up. 
C) the extensive assistance offered in finding start-up capital. 
D) the absolute territory protection offered by all franchisers.

Question 11

Independent entrepreneurs with a "go-my-own-way" attitude are ideally suited for becoming franchisees.

Accepted Answer

A) True 
 B)False

Question 12

McDonald's is an example of a ________ franchise.

Accepted Answer

A) conversion 
B) trade name 
C) product distribution 
D) pure 
A) conversion 
B) trade name 
C) product distribution 
D) pure

Question 13

When it comes to purchasing products,equipment,etc. ,the franchiser:

Accepted Answer

A) cannot require the franchisees buy from the franchise company. 
B) can set prices paid for the products,etc. ,but cannot set the retail price the franchisee charges. 
C) is permitted to set the retail price for the franchisee. 
D) cannot require franchisees to buy from an "approved" supplier. 
A) cannot require the franchisees buy from the franchise company. 
B) can set prices paid for the products,etc. ,but cannot set the retail price the franchisee charges. 
C) is permitted to set the retail price for the franchisee. 
D) cannot require franchisees to buy from an "approved" supplier.

Question 14

One of the most litigated subjects of a franchise agreement is the termination of the contract by either party.

Accepted Answer

A) True 
 B)False

Question 15

A poor image for the entire franchise could result from some franchisees using inferior products to cut costs.

Accepted Answer

A) True 
 B)False

Question 16

According to experts,the most important factor in franchising is location.

Accepted Answer

A) True 
 B)False

Question 17

In franchising,royalties are paid by the franchisee to the franchisor.

Accepted Answer

A) True 
 B)False

Question 18

When a franchisee buys a franchise,he/she is purchasing the expertise and the business experience of the franchisor.

Accepted Answer

A) True 
 B)False

Question 19

Franchising is an important part of the U.S.economy.Briefly explain its importance,define franchising,and identify the three basic types of franchises.

Accepted Answer

Through franchised businesses,consumers

Question 20

In a franchise arrangement,the franchiser controls the distribution methods of the business venture.

Accepted Answer

A) True 
 B)False

Exam 6: Franchising and the Entrepreneur

Typically,the franchiser controls are very tight on what the franchisee:

Territorial encroachment is becoming a hotly contested issue as franchisers have nearly exhausted prime locations for franchises.

Which of the following is an indication of a dishonest franchiser?

In most cases,startup costs for franchises often do not include any additional fees.

McDonald's relies almost exclusively on the trade name type of franchising.

When evaluating a franchise,the potential franchisee should:

The primary market for U.S.franchisors is Europe.

The only fee that franchisers can collect from franchisees is a one-time franchise fee paid at the outset of the relationship.

By the 1920s,franchising was rife with fraudulent practitioners.

The primary advantage of buying a franchise over starting your own company is:

Independent entrepreneurs with a "go-my-own-way" attitude are ideally suited for becoming franchisees.

McDonald's is an example of a ________ franchise.

When it comes to purchasing products,equipment,etc. ,the franchiser:

One of the most litigated subjects of a franchise agreement is the termination of the contract by either party.

A poor image for the entire franchise could result from some franchisees using inferior products to cut costs.

According to experts,the most important factor in franchising is location.

In franchising,royalties are paid by the franchisee to the franchisor.

When a franchisee buys a franchise,he/she is purchasing the expertise and the business experience of the franchisor.

Franchising is an important part of the U.S.economy.Briefly explain its importance,define franchising,and identify the three basic types of franchises.

In a franchise arrangement,the franchiser controls the distribution methods of the business venture.

Entrepreneurs: the Driving Force Behind Small Business

Ethics and Social Responsibility: Doing the Right Thing

Creativity and Innovation: Keys to Entrepreneurial Success

Strategic Management and the Entrepreneur

Choosing a Form of Ownership

Buying an Existing Business

New Business Planning Process: Feasibility Analysis,business Modeling,

Building a Bootstrap Marketing Plan

Creative Use of Advertising and Promotion

Pricing and Credit Strategies

Global Marketing Strategies

E-Commerce and Entrepreneurship

Creating a Solid Financial Plan

Managing Cash Flow

Sources of Equity Financing

Sources of Debt Financing

Location,layout,and Physical Facilities

Supply Chain Management

Managing Inventory

Staffing and Leading a Growing Company

Management Succession and Risk Management Strategies in the Family Business

The Legal Environment: Business Law and Government Regulation

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