Franchisees may pay a fee that is separate from the royalty fee, often called a ________, to contribute to a shared advertising fund. A dealer who distributes product from a product line supplied by a franchisor is considered to be engaged in: A number of major questions should be addressed by a potential franchisor before choosing to expand through franchising. Operational Control. C. Nature of product and number of channel members If you are looking to start a business that is creative and is not controlled by others, then franchising is your best option. They meet with a business planner who helps them compile a business plan. d. Actions by franchisors to void the contracts of franchisees in order to sell the franchise to someone else and collect an additional fee. Bringing two or more franchise brands together within a single enterprise. The exercise of reasonable care in the evaluation of a business opportunity. Bus-x100 Exam #2 Flashcards | Quizlet Which of the following types of businesses benefit from being located near competitors? E. The details of franchise management are vague enabling franchisees to adapt to changing environmental conditions. franchisor supplies brand names, techniques, or other services instead of a complete product. d. franchise fees new-new, new-old new-new D) All of the above are types of franchising. When buying a small business you need to know all of the following items except: Bill has his own tax preparation and accounting business. Ch. 5 business Flashcards | Quizlet she will work very hard putting in long hours about six days a week, The SBA assists small-business owners entering the world markets by doing all of the following except, offering long term loans to US business owners. Darrel's Donuts has been operating quite successfully for two years. b. Which descriptive statement is NOT one of the legal ways of protecting a trademark? The first step for the franchisor to do is: contact and listen to each franchisee as possible, to determine what are the problems to be addressed. d. T/F, As of 2008, the Federal Trade Commission's Franchise Rule presribes that franchisors must disclose to prospective franchisees info such as bankruptcies, business experience of the principals, and litigation in which the firm is involved. process for expanding a business or service through licensing arrangement. Which of the following statements regarding franchisors' long-term success are true? 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. machinery. A) Success d. Decide whether the following statement makes sense or not Explain your reason. franchiser a. the cost of replacing an employee. Marketing strategy. inventory turnover. Which of the following is not an element of a tort? a. c. Communications between franchisors and franchisees is one-way, performance data that flows from the franchisee to the franchisor. Obtain needed training from franchisees E) Not be counted on, A) Provide a significant advantage for your business start-up, All of the following are advantages of franchising except ________. c. C. Franchise fee. This is a ___ business. Developing a plan for the business. use of private labels to brand or trademark product or service. a. Which of the following things is NOT true about the accounting process? Franchisors sometimes act like a business partner. c. the franchise prepaid expenses The franchise with the most outlets in the United States is. d. Increased management flexibility There are six major organizational development tasks required of a franchisor to develop from a single unit firm into a growing franchise system. NOT: to improve operations at franchised units. Which of the following is not a key question a prospective buyer needs to ask in buying a business? Regulations that protect consumers include trademarks, zoning, regulations, and consumer protection laws. weaknesses. Franchisors must have a high-quality support c. Chapter 1-4 Flashcards | Quizlet Not coincidentally, these issues have become more prevalent and evident with the advent of Many fees are must be paid regardless of ________. Policies and procedures for running the business. A. franchisor In a franchise, two parties are involved, the franchisee and franchisor. location of the competition. Business students at universities can work together to provide management counseling to small businesses in their community. Which of the following types of financial ratios measures the ability of the franchise organization to turn sales into profits? The information contained in the daily business intelligence reports becomes the foundation upon which a franchise system builds what? Darrel is considering expanding the business by franchising. d. Business situations that are appropriate to consider when looking for growth through franchising include all but which one of the following? The _____approach indicates the importance of people's awareness of their daily lives for developing new business ideas. Which of the following is something that would not be included in the plan? equity? d. Jimmy John's, Which is not a cost of franchising? A franchisor's revenue from royalties and selling supplies provide _________ income than that earned from initial franchise fees. D) Promotional support Why would a franchise system monitor its external environment? a. competition may be spending more money on advertising than you. He states in the plan, "This business will serve over 400 customers by the end of the year and employ ten full-time employees." Pick the correct phrase from the following that best characterizes the relationship between franchisors and franchisees. The business that represents 99.7 percent of all employers in the United States is a. Which philosophy of expansion is, as a rule, the best method for franchisors? Marilyn argues that the SBA's primary function is to lend money. All of these are ways a franchisor makes money; E. All of the above statements are true. A realistic estimate for the cost of legal requirements to begin a franchising system could be: How many phases are included in the Franchise PERT Chart? Identify which generic category fits most franchise systems below. 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. H0:1222Ha:12>22. All are costs. d. 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? In the franchise system's "Bankruptcy" section of the UFOC, the company must disclose which of the following? C. These franchises operate in environments with little competition. 100, Which of the following costs add to the cost of franchising? The most significant advantage of a franchise is the increased probability of ________, given that franchise brands have positive track records and instant recognition in most communities. C) Uniformity a. Match the situations involved in the negotiation process between a franchisor and a franchisee with their likely outcome: The franchisor might negotiate a complete different deal with the granchisee in order to get started with a self-sufficient operator. all of the above. The Uniform Franchise Offering Circular _______. All of the following are a new type of franchising opportunity except ________. Spend a significant amount of time being visible. asset value. And, how much will it cost to implement? All of the above statements are accurate. Why is the owner selling? He feels that the franchisor is hurting his business by forcing him to buy higher priced products from high-priced suppliers. b. C. Training. Buildings E. Is a government tax to register the franchise. Chapter 4 Franchises and Buyouts Assessment Flashcards E. The desired degree of control of franchisees by franchisors is not relevant to the decision by franchisors to use the franchise channel model. Who is responsible for these activities and outcomes? all of the above, The UFOC contains how many sections: As a class assignment, business students were told to prepare a business plan for a business they would like to own. Small Business Chp IV - Franchises and Buyouts Flashcards c. Henry approaches her about operating his own business under the terms above. Which of the following is not a disadvantage of a major franchise? D) Federal Disclosure Document c. b. He wants the business to succeed. planning, persistence, patience, people, profit (pg 136) what are the 3 23 a. f(t)=t2t+2. The ___________ is a contract linking all franchisees to the franchisor. a, b, and c only. Macy because the SBA's primary financial function is to guarantee loans. E) Employees, A franchisor's record of success can ________. WebThe Franchisor provides all the following Except. A) Themselves A wholesaler purchases products in quantity from _____ and then resells them to retailers. B. A corporation pays taxes both on its income and on the amount it pays out in dividends, it faces very little government regulation. firms that have complex internal systems to execute, that draw from a limited pool of qualified employees, or require significant amounts for training to assure franchisee competence in delivery of the system's products or services. payment of a fee. What are they? Which of the following processes involves interpreting a relationship between two financial figures? Juan has been awarded a franchise in an industry in which the franchisor has licensed him to sell and distribute its product to retailers. c. c. unscrupulous practices. Which major question in his business plan does this statement address? The franchisor licenses its trademarked products to franchisees. journal, general ledger, financial statements. Adequate frontage is a necessity for most retail businesses. 3- Customers already know you exist. D) Data regarding existing units D. Is based on a percentage of the franchisee's gross sales. 20% invest money in the operation. number of competitors. explanation: Franchisees often report the following advantages: management training and support; brand-name appeal; standardized quality of goods and services; national advertising programs; financial assistance; proven products and business formats; centralized buying power; site selection and territorial protection; a greater chance for success. d. b. B. D) Many legal disputes Which of the following sequences indicates the path taken by these figures during the accounting process? Where should you retire someday? After doing routine background checks, the firm permits John to open a branch of the firm in a given area, use the firm's name, and operate a business within the guidelines of an agreement. All of the above. He works many hours from January through April but in May takes a month-long vacation and the rest of the year works part-time. A) Product and trade-name franchising d. Franchisees that create a poor brand image through bad customer service _________. Find all vertical and horizontal asymptotes of the graph of the given function. liquidation pricing, "Piggybacking" one's way into business involves using a ____approach. D. Service providers that wish to maintain a high degree of control over channel members are likely to use the franchise channel model. a. What Should the Franchisor Control? - Franchise Law, Disputes income or wealth. A franchisee that has inconsistent quality or service not only hurts his or her own business but also impacts the brand images of all the other franchisees. company name. A. Franchisors provide significant operational assistance to franchisees. Which one of the following is Not a common method of borrowing funds in the short-term when considering the rate of interest to be paid: To fund a franchise business, most franchisee use: In financial planning with the franchised business, the most basic and essential variable of the financial planning tools is the: All of the current assets of the firm, or more specifically, current assets minus current liabilities equals: Estimation of sales and other income for a period and cash disbursements to be paid in the same period identifies the components of the: What is the primary purpose of information systems in a large franchise? High-tech ___ entrepreneurship is exploding. WebWhat is usually required for a franchisor to terminate a franchise? both of the above. The reason franchises have been a popular form of business is due to ___________. All of the above, Have a seller retain a _____interest in the business. C) Popularity WebThe Franchisor bills and received payment from the customer directly, and then after deducting its royalties and other fees and payments, sends the Franchisee the balance; If E) Brand, Subway restaurants can be found ________. In franchising, the _____ is the firm that originates the idea for a business and develops the operational methods. Equipment Capital advantages price competition may affect profits. c. The elimination of time and effort associated with starting a company is an advantage of acquiring an ongoing venture. d. It is structured between single-unit and multi-unit franchises. Godfrey has just graduated from business school and is seeking employment. NOT: asset utilization for the business B) Marketing the franchisor. determining markets in a geographical area with suitable customer demographics. Stuart has $50,000 to start a new business. a. d. b. It takes special knowledge and skills to conduct an effective turnaround. Which of the following is a true statement pertaining to single-unit franchises? maintain a specified quality of performance. b. Business format franchising is best illustrated by the system offered by, The franchising strategy whereby an individual or firm is granted the legal right to own more than one unit of a franchised business is known as. A. Changes in zoning which affect the business. E. All of the above. B) Business-format franchising b. risk versus reward. What special skills does the entrepreneur have that will bring success? D) Be proven your accountant. A) Provide a significant advantage for your business start-up The implementation of marketing mix variables in franchise channels is less fluid and flexible than in conventional channels.