What changes will be made? They have heard that the disadvantages of small businesses include all of the following except. CHAPTER 2 Flashcards | Quizlet Why would a person choose to buy a franchise? a. a. C) Popularity Which of the following is a question which can be sidestepped when buying a business? With regard to the evaluation of franchisee performance and degree of control: The high degree of control by the franchisor helps to provide a guaranteed, detailed, and regular flow of performance data that benefits both parties. What are the typical payments paid by a franchisee to a franchisor? What's the difference between the sales package and sales playbook? Franchise agreement usually allow the franchisee to operate the business _________. Selling a franchise to the franchisee An ongoing entity often has a higher purchase price due to __________. The number of franchised business establishments has continued to growth in the U.S. Today there are approximately ( ) franchise businesses in operation. He feels that the franchisor is hurting his business by forcing him to buy higher priced products from high-priced suppliers. Portica knows the customers of her hat shop by name and knows each of their preferences. Some franchisors provide different levels of support depending on how much the franchisee is willing to pay. When Reno purchases the McDonald's she will be expected to supply, labor and capital and will own and operate the outlet. The "_______" section of the UFOC contains how disagreements will be resolved. Adequate frontage is a necessity for most retail businesses. How old is the business? c. How long has a franchisor been in the business? An existing business has an established cash flow. Franchisees may pay a fee that is separate from the royalty fee, often called a cooperative advertising fee, to contribute to an individual advertising fund. A regular and continuous fee paid to the franchisor by the franchisee is called: C) Purchasing power A franchisor pays a fee to obtain a franchise. Identify an accurate statement about buying an existing business. b. Any cost saving resulting from franchisee purchasing power helps to offset other costs, such as franchise ________. Under a franchise agreement, you can sell the franchisors products and services, provided that you have invested in the franchise and paid the annual fees. Conversely, franchises typically have an established brand, streamlined management practices, and ongoing support. c. a financial investment. Equipment franchisee b. c. a. T/F, Because the offering and sale of a franchise are more intensely regulated by state and federal laws than is the establishment of a new business, individuals and/ or firms involved in negotiating a franchise arrangement have limited need for legal counsel. a. Which major question in his business plan does this statement address? Solved All of the following are reasons a franchisor may - Chegg Which of the following statements are relevant to the definition of, "franchise"? Chapter 4 Franchises and Buyouts Assessment Flashcards Which of the following is something that would not be included in the plan? (Check all that apply.) d. insurance training and guidance provided by the franchisor. Why would a franchise system monitor its external environment? old-old. c. a, b, and c only. He is considering applying to small firms because he knows that small businesses have traditionally added _____ new jobs to the economy. To better understand the demand for a product or service. A. a. Which of the following organizations would most likely give her the help she needs? The most important area to examine prior to purchasing a business is company profitability. A) Type of franchise Marilyn argues that the SBA's primary function is to lend money. c. This includes all of the following except: Entitle the franchisee to use the franchise's name. Business students at universities can work together to provide management counseling to small businesses in their community. Before we discuss who gets control of the franchise operations, lets clear up some terms about the people involved in the franchise model. The franchisor owns the trademark and business model. Upon paying the upfront fee and continuing royalties, the franchisor grants the franchisee the rights to use the trademark and business model. c. d. The advantages of franchising include: In multi-unit franchisees, franchisees receive permission from the franchisor to own and operate more than one unit at the outset of their relationship, whereas single-unit franchises initially only receive permission to operate a single unit. b. b. Regulations that protect consumers include trademarks, zoning, regulations, and consumer protection laws. b. Generally, the larger and more successful the franchisor, the greater the franchise fee that is charged. The franchise with the most outlets in the United States is. b. To be a successful leader, Jim Peterson, franchisor and former President of the IFA, believes it is necessary for four factors to exist for a person to be a successful leader. brand-name appeal of the franchise Which of the following is true regarding the costs of franchises? What is the key to convincing someone to purchase your franchise, product, or service? NOT: to generate data which can be used to accumulate working knowledge Prior job D. Real estate. Degree of control and importance of channel members a. D) Data regarding existing units and b. The franchisor licenses its trademarked products to franchisees. Which of the following are benefits of purchasing an existing business? Insurance C. Training. This is the most common form of franchise channel structure. Advertising The International Franchise Association is ________. d. On-site management In exchange for an ownership share, small businesses receive financing from a group of investors known as B. The information contained in the daily business intelligence reports becomes the foundation upon which a franchise system builds what? Which franchisor manual provided by the franchisor to new franchisees is referred to as "the bible?". old-new E. All of the above are about equal. the cost of replacing an employee. When buying a small business you need to know all of the following items except: A. Which descriptive statement is NOT one of the legal ways of protecting a trademark? Which of the following is not a type of franchising according to the text? it is possible to start a business with limited capital. Why is the business being sold? should I have right of first-refusal on site selection? Negotiating a deal to acquire exactly what is required from the operation. TRY: data analyses. use of private labels to brand or trademark product or service. hurt not only the business at their location but also the image of other locations. 2. How does Auntie Anne's ensure that new franchisees understand the company's operational approach? B) Not required The franchisor cannot require the individual franchisee to adhere to a(n) ________. Developing a plan for the business. Maria has purchased a Subway franchise. One downside for franchisors participating in franchise channels is: An individual looking to buy a franchise should _________. C. Nature of product and number of channel members b. Brenda has a small grocery store in a residential neighborhood where she primarily sells staples to the people who live in the area. franchatter. B) Consistency True or false: A franchisor and a franchisee are both dependent on each other for success. d. T/F, Franchising is a two-party legal agreement whereby a franchisor is granted the privilege to conduct business as an individual owner according to the methods and terms specified by the franchisee. Regarding the issue of control of franchisees by franchisors, which of the following is most accurate? D. System to network with competing franchises. A) Internet franchises B) Conversion franchises C) Co-branding franchises D) Piggybacking franchises E) Leapfrogging franchises E) Leapfrogging franchises Any cost saving resulting from As a class assignment, business students were told to prepare a business plan for a business they would like to own. Which of the following types of businesses benefit from being located near competitors? Anastasia has started a dry cleaning business but is having difficulties with various aspects of organizing and operating the business. A) Fully understanding the FDD of the franchise company Fundamentals of Financial Management, Concise Edition, Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield, Marketing Essentials: The Deca Connection, Carl A. Woloszyk, Grady Kimbrell, Lois Schneider Farese. Godfrey has just graduated from business school and is seeking employment. D) Both A and B poll tax that required each person to pay a flat B) Calling on existing franchisees the market. A franchise system can be used for handling The market research should be independent of the franchisor. c. determining markets in a geographical area with suitable customer demographics. on their support for important areas such as accounting, marketing, and training. In this scenario, John is a _____. Franchisors sometimes act like a business partner. Where should the business be located? a. unscrupulous practices. Product and trade-name franchising is the licensing of the product or the production of the product and the use of the trademark, logo, or other identity of the franchise. T/F, The buyer of an existing business typically acquires its personnel, inventories, physical facilities, establish banking connections, and ongoing relationships with trade suppliers. An existing business has the benefit of having an established set of processes. c. Ellis owns a Subway franchise. ( ) usually provides the starting-point of data collection when conducting marketing research. B. The most common form of business ownership in the United States is the corporatio. new-old, old-old design a logo for the unit. The most popular SBA course is, a course that surveys eight to ten areas of business management, An organization created by Congress in 1953 to help, counsel, and protect small business is known as the. C) Penalty d. Which of the following is NOT one of the four P's of selling? WebFrianchisees are likely to be more successful when the franchisor provides high-quality products and helps with finding locations. The costs of franchises vary significantly. C. Increased regulatory scrutiny. The individual who arranges for a dealer to handle a specific product or service under certain mututally agreed upon conditions is known as the _____. majority d. insurance What are the four main areas of taxation one must consider when reporting about a franchise's activity? Frieda's Freestyle Skateboards has many customers but is not dominant in its field. Education courses, What is the largest source of new business ideas among women? The ___________ is a contract linking all franchisees to the franchisor. What is a realistic number for a sample size when doing market research? loss of freedom and control as franchise system grows. success will cause another outlet to be opened nearby. Which one of the following is not one of the levels for development? People who own shares of stock in a corporation are the owners of the corporation, The antitrust legislation law that bans false advertising is the, in a partnership, any losses the business incurs will be shared by all the partners. The "Restrictions on the Sources of Products and Services" section of the UFOC describes _______, what the potential franchisee must purchase from the franchisor and what the franchisee can source independently. A. A primary consideration for a potential franchisee is that the capital required to become a franchisee will likely be: about the same or potential more for starting a franchise business compared to starting an independent business in the same field. c. d. Which of the following should the potential entrepreneur consider in developing a plan of operation? A) Training franchisor supplies brand names, techniques, or other services instead of a complete product. the financial picture of the business. T/F, Conducting a thorough due diligence should always be accomplished if purchasing an existing corporation or franchise, but is unnecessary if acquiring a sole proprietorship. control exercised by the franchisor None of the above, Who must negotiate the final deal? A. Franchisors provide significant operational assistance to franchisees. What is the first step to good site selection? d. B) Failure b. b. What is the name of the business agreement Henry would sign? franchisor Sales tax. maintain a specified quality of performance. D) Gender Franchisees have the option of using the logo and symbols of the franchisor. In the "_________" section of the UFOC, the franchisor must disclose all fees that are charged to franchisees. 9 In the franchise industry, the person or business providing the rights to an individual for the local distribution and/or sales of a specified product or service is called the: Probably the earliest example of franchising in the United States is most likely to be: A major reason for success of franchising is that the franchisor can use all of the following from the franchisee EXCEPT for the franchisee's: Which of the following industries provides the earliest and lasting example of franchising in the U.S. economy? it may be purchased at a bargain price. D) Capacity to secure franchisees Wherein the goal of the market-focused business strategy is to identify and supply product/service to discrete segments with promise of strong demand yet allowing for flexibility in meeting demand and where a firm can concentrate its internal resources describes characteristics of which of the following four market-focused business strategies? a. The Federal Trade Commission regulates franchise. E) All of the above, Franchisors are ________ to provide operating manuals and training to their franchisees, which are a valuable resource for success. process for expanding a business or service through licensing arrangement. C) Ensures ongoing support b. C) Encouraged Which of the following things is NOT true about the accounting process? all of the above, The UFOC contains how many sections: Which of the following activities at the franchised unit should be the center of attention? d. Franchising is based on a system that the franchisor has already set upand it works. Thus, franchisees must comply with both the franchise agreement and the franchise operations manual to achieve a comparable level of performance. Moreover, these materials safeguard the whole franchise. All of the above statements are accurate. Business format franchises are prevalent in which of the following businesses? C. Potential to reduce distribution costs NOT: anticipated costs of operation. a deferential sale of business clause. Up-front capital requirements brand-name appeal. E) All of the above, The FDD includes information such as ________. What is the name of that program? What amount is generally considered adequate? E. Is a government tax to register the franchise. E. Number of manufacturers in the industry. In purchasing an existing business the first question should be: "Why are you selling?". a, b, and c above, When this asset is purchased, the buyer should be sure to deduct those so old that they are deemed uncollectible. C) Uniformity d. Does a physical count correspond with the book count? a. Identify the unique aspects to purchasing an existing business. The party granting the license is the. the franchisee's revenue stream is fairly consistent because franchisers pay fixed fees and Franchising offers all the following benefits for franchisers except. provide continuing aid and a guidance to the person buying the franchise. prepaid utility bills new-old. b. Reno is a. Several years ago the British government imposed a awareness of some of the unfilled promises from franchisors, Which of the following costs do not add to the cost of franchising? In franchising, the _____ is the firm that originates the idea for a business and develops the operational methods. Operational Control. b. all of the above. the franchisor offering a standard,well-known product or service. Which of the following statements most accurately describes the success rate of franchises? track record of the other franchisees as proof of success Strong franchisors have all of the following except ________. The business franchise model is always an appropriate model to ensure a high degree of control, regardless of the industry. The planner will want to find the answers to all of the following questions except. c. D. Franchisors spend billions of dollars annually to keep franchisees trained. Though a location manual or policy may be developed to assist in determining optimal sites, for franchised businesses that require a store-front location the final determination often rests with: Which two concepts receive primary consideration when determining store layout?
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