Question 1

The document that governs the relationship between a franchisor and the franchise is the:

Accepted Answer

A) FTC. 
B) FDD. 
C) UFOC. 
D) FOC. 
A) FTC. 
B) FDD. 
C) UFOC. 
D) FOC.

Question 2

Outline the process of buying a franchise,naming and briefly explaining each step you should go through.

Accepted Answer

To buy a franchise the right way require

Question 3

Describe the key trends that will affect franchising over the next decade.

Accepted Answer

Trends influencing franchising include:

Question 4

A master franchise is also called:

Accepted Answer

A) sub-franchise. 
B) cobrander. 
C) Both A and B 
D) None of the above 
A) sub-franchise. 
B) cobrander. 
C) Both A and B 
D) None of the above

Question 5

What franchisee turnover rate is probably sound?

Accepted Answer

A) Less than 5 percent 
B) Less than 15 percent 
C) Less than 25 percent 
D) Less than 35 percent 
A) Less than 5 percent 
B) Less than 15 percent 
C) Less than 25 percent 
D) Less than 35 percent

Question 6

The first,second and third growth wave in franchising respectively,are:

Accepted Answer

A) low-cost franchises that focus on niche markets;shift to service sector;fast-food restaurant using the concept of rapid growth. 
B) fast-food restaurant using the concept of rapid growth;shift to service sector;low-cost franchises that focus on niche markets. 
C) low-cost franchises that focus on niche markets;fast-food restaurant using the concept of rapid growth;shift to service sector. 
D) shift to service sector;low-cost franchises that focus on niche markets;fast-food restaurant using the concept of rapid growth. 
A) low-cost franchises that focus on niche markets;shift to service sector;fast-food restaurant using the concept of rapid growth. 
B) fast-food restaurant using the concept of rapid growth;shift to service sector;low-cost franchises that focus on niche markets. 
C) low-cost franchises that focus on niche markets;fast-food restaurant using the concept of rapid growth;shift to service sector. 
D) shift to service sector;low-cost franchises that focus on niche markets;fast-food restaurant using the concept of rapid growth.

Question 7

It is important for potential entrepreneurs to have extensive experience in the business in which they are buying a franchise.

Accepted Answer

A) True 
 B)False

Question 8

The basic and first question an entrepreneur should ask him/herself before jumping into a franchise is,"How much is this going to cost me?"

Accepted Answer

A) True 
 B)False

Question 9

When the franchisee has the right to establish a semi-independent organization in a particular territory to recruit,sell,and support other franchises,it is called a ________ franchise.

Accepted Answer

A) multi-unit 
B) piggyback 
C) conversion 
D) master 
A) multi-unit 
B) piggyback 
C) conversion 
D) master

Question 10

Despite all the benefits,there are a number of disadvantages to franchises,such as:

Accepted Answer

A) the time consumed by the management training and support the franchiser provides. 
B) the cost of national advertising. 
C) strict adherence to standardized operations. 
D) territory limitations. 
A) the time consumed by the management training and support the franchiser provides. 
B) the cost of national advertising. 
C) strict adherence to standardized operations. 
D) territory limitations.

Question 11

________ franchising involves providing the franchisee with a complete business system-the established name,the building layout and design,accounting systems,etc.

Accepted Answer

A) Product distribution 
B) Trade name 
C) Pure 
D) Conversion 
A) Product distribution 
B) Trade name 
C) Pure 
D) Conversion

Question 12

What is the Franchise Disclosure Document? Offer several examples of what type of information is required in the FDD.

Accepted Answer

The Federal Trade Commission required al

Question 13

Franchisors can require franchisees to purchase materials and supplies only from approved suppliers.

Accepted Answer

A) True 
 B)False

Question 14

If a franchisor encourages you to sign without reading the agreement,or discourages you from "spending the money on an attorney," this is a warning sign that the franchiser might be dishonest.

Accepted Answer

A) True 
 B)False

Question 15

In franchising,the reputation of the franchiser is dependent on:

Accepted Answer

A) their locations and popularity with the local customer. 
B) the brand name recognition and appeal. 
C) the rate of growth and the number of national outlets. 
D) the quality of the goods and services provided. 
A) their locations and popularity with the local customer. 
B) the brand name recognition and appeal. 
C) the rate of growth and the number of national outlets. 
D) the quality of the goods and services provided.

Question 16

The ________ requires all franchisers to disclose detailed information on their operations at the first personal meeting or at least fourteen days before a franchise contract is signed or any money is paid.

Accepted Answer

A) FCC 
B) FDD 
C) Trade Regulations Rule 
D) FDA 
A) FCC 
B) FDD 
C) Trade Regulations Rule 
D) FDA

Question 17

By signing the franchise contract,a franchisee typically surrenders some freedom and autonomy in operating his/her business.

Accepted Answer

A) True 
 B)False

Question 18

The success of franchising is largely due to:

Accepted Answer

A) the economic growth of the United States and other developed nations,economies. 
B) more college students choosing to go to work for themselves rather than for corporations. 
C) the mutual benefits it provides to the franchiser and franchisee. 
D) All of these factors 
A) the economic growth of the United States and other developed nations,economies. 
B) more college students choosing to go to work for themselves rather than for corporations. 
C) the mutual benefits it provides to the franchiser and franchisee. 
D) All of these factors

Question 19

________ franchising involves the owner of an existing business becoming a franchisee to gain the advantage of name recognition.

Accepted Answer

A) Product distribution 
B) Master franchise 
C) Conversion 
D) Pure 
A) Product distribution 
B) Master franchise 
C) Conversion 
D) Pure

Question 20

In ________ franchising,a franchisee purchases only the right to become identified with the franchiser's trade name.

Accepted Answer

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

Exam 6: Franchising and the Entrepreneur

The document that governs the relationship between a franchisor and the franchise is the:

Outline the process of buying a franchise,naming and briefly explaining each step you should go through.

Describe the key trends that will affect franchising over the next decade.

A master franchise is also called:

What franchisee turnover rate is probably sound?

The first,second and third growth wave in franchising respectively,are:

It is important for potential entrepreneurs to have extensive experience in the business in which they are buying a franchise.

The basic and first question an entrepreneur should ask him/herself before jumping into a franchise is,"How much is this going to cost me?"

When the franchisee has the right to establish a semi-independent organization in a particular territory to recruit,sell,and support other franchises,it is called a ________ franchise.

Despite all the benefits,there are a number of disadvantages to franchises,such as:

________ franchising involves providing the franchisee with a complete business system-the established name,the building layout and design,accounting systems,etc.

What is the Franchise Disclosure Document? Offer several examples of what type of information is required in the FDD.

Franchisors can require franchisees to purchase materials and supplies only from approved suppliers.

If a franchisor encourages you to sign without reading the agreement,or discourages you from "spending the money on an attorney," this is a warning sign that the franchiser might be dishonest.

In franchising,the reputation of the franchiser is dependent on:

The ________ requires all franchisers to disclose detailed information on their operations at the first personal meeting or at least fourteen days before a franchise contract is signed or any money is paid.

By signing the franchise contract,a franchisee typically surrenders some freedom and autonomy in operating his/her business.

The success of franchising is largely due to:

________ franchising involves the owner of an existing business becoming a franchisee to gain the advantage of name recognition.

In ________ franchising,a franchisee purchases only the right to become identified with the franchiser's trade name.

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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