Question 1

Franchise advertising programs:

Accepted Answer

A) are organized by the franchiser but controlled locally by the franchisee. 
B) are an expense borne by the franchiser. 
C) require franchisees to spend a minimum amount on local advertising. 
D) allow voluntary participation. 
A) are organized by the franchiser but controlled locally by the franchisee. 
B) are an expense borne by the franchiser. 
C) require franchisees to spend a minimum amount on local advertising. 
D) allow voluntary participation.

Question 2

Typically,franchise contracts:

Accepted Answer

A) are short-term,for 10 years or less. 
B) are heavily weighted in favor of the franchisee due to federal regulation. 
C) do not cover transfer and buyback provisions. 
D) are not negotiated by established franchisers. 
A) are short-term,for 10 years or less. 
B) are heavily weighted in favor of the franchisee due to federal regulation. 
C) do not cover transfer and buyback provisions. 
D) are not negotiated by established franchisers.

Question 3

Pure franchising involves the right to use all the elements of a fully integrated business operation.

Accepted Answer

A) True 
 B)False

Question 4

The most efficient method of franchising,from the franchiser's point-of-view,which has become popular in the 1990s and permits one franchisee to hold several franchises from the same franchise company,is called:

Accepted Answer

A) multiple-unit franchising. 
B) master franchising. 
C) conversion franchising. 
D) piggybacking. 
A) multiple-unit franchising. 
B) master franchising. 
C) conversion franchising. 
D) piggybacking.

Question 5

Establishing a Mrs.Fields Cookies franchise inside a Hardees fast-food franchise is an example of ________ franchising.

Accepted Answer

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

Question 6

Franchising benefits the franchisor by providing a quick way to expand the distribution system and a way to grow without the cost and effort to develop managers internally.

Accepted Answer

A) True 
 B)False

Question 7

The biggest challenge facing the growth of new franchises is:

Accepted Answer

A) the lack of capital. 
B) competition from independent entrepreneurs. 
C) market saturation. 
D) the recent downturn in the economy. 
A) the lack of capital. 
B) competition from independent entrepreneurs. 
C) market saturation. 
D) the recent downturn in the economy.

Question 8

Discuss franchise contracts covering their current state,factors in their termination,renewal,and transfer,and what the most common dispute tends to be.

Accepted Answer

The franchise contract summarizes the de

Question 9

Most gasoline products are sold through the ________ system of franchising.

Accepted Answer

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

Question 10

Buying a franchise prevents an entrepreneur from making many mistakes and avoids the most inefficient type of learning-trial and error.

Accepted Answer

A) True 
 B)False

Question 11

The franchiser has the right to cancel a contract if a franchisee:

Accepted Answer

A) declares a bankruptcy. 
B) fails to make required payments on time. 
C) fails to maintain quality standards. 
D) All of the above 
A) declares a bankruptcy. 
B) fails to make required payments on time. 
C) fails to maintain quality standards. 
D) All of the above

Question 12

Perhaps the best way to evaluate the reputation of a franchiser is to ________ several franchise owners.

Accepted Answer

A) meet 
B) interview 
C) write 
D) Both A and B 
A) meet 
B) interview 
C) write 
D) Both A and B

Question 13

The most expensive franchises in terms of total investment are:

Accepted Answer

A) retail franchises. 
B) business service franchises. 
C) McDonald's franchises. 
D) hotel and motel franchises. 
A) retail franchises. 
B) business service franchises. 
C) McDonald's franchises. 
D) hotel and motel franchises.

Question 14

When franchise contracts are renewed:

Accepted Answer

A) the existing contract is merely annotated and signed by both parties. 
B) a new UFOC must be issued. 
C) all terms of the previous contract may be renegotiated. 
D) a new contract must be drawn up by the two parties. 
A) the existing contract is merely annotated and signed by both parties. 
B) a new UFOC must be issued. 
C) all terms of the previous contract may be renegotiated. 
D) a new contract must be drawn up by the two parties.

Question 15

To protect investors from unscrupulous franchisers,the regulatory body is the:

Accepted Answer

A) FCC. 
B) Justice Department. 
C) FDA. 
D) FTC. 
A) FCC. 
B) Justice Department. 
C) FDA. 
D) FTC.

Question 16

When Wal-Mart began having McDonald's restaurants share their retail space they were exercising master franchising.

Accepted Answer

A) True 
 B)False

Question 17

Franchising,as a method of conducting business,has declined in importance in the past five years in international markets.

Accepted Answer

A) True 
 B)False

Question 18

Training programs often involve both classroom and on-site instruction to teach franchisees the basic operations of the business -from producing and selling the goods or services to purchasing raw materials and completing paperwork.

Accepted Answer

A) True 
 B)False

Exam 6: Franchising and the Entrepreneur

Franchise advertising programs:

Typically,franchise contracts:

Pure franchising involves the right to use all the elements of a fully integrated business operation.

The most efficient method of franchising,from the franchiser's point-of-view,which has become popular in the 1990s and permits one franchisee to hold several franchises from the same franchise company,is called:

Establishing a Mrs.Fields Cookies franchise inside a Hardees fast-food franchise is an example of ________ franchising.

Franchising benefits the franchisor by providing a quick way to expand the distribution system and a way to grow without the cost and effort to develop managers internally.

The biggest challenge facing the growth of new franchises is:

Discuss franchise contracts covering their current state,factors in their termination,renewal,and transfer,and what the most common dispute tends to be.

Most gasoline products are sold through the ________ system of franchising.

Buying a franchise prevents an entrepreneur from making many mistakes and avoids the most inefficient type of learning-trial and error.

The franchiser has the right to cancel a contract if a franchisee:

Perhaps the best way to evaluate the reputation of a franchiser is to ________ several franchise owners.

The most expensive franchises in terms of total investment are:

When franchise contracts are renewed:

To protect investors from unscrupulous franchisers,the regulatory body is the:

When Wal-Mart began having McDonald's restaurants share their retail space they were exercising master franchising.

Franchising,as a method of conducting business,has declined in importance in the past five years in international markets.

Training programs often involve both classroom and on-site instruction to teach franchisees the basic operations of the business -from producing and selling the goods or services to purchasing raw materials and completing paperwork.

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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