planning, persistence, patience, people, profit (pg 136) what are the 3 D) Be proven goodwill. There are few resources for franchise research. WebThe purchaser of a franchise is called the franchisor. 20% NOT: to improve operations at franchised units. An existing business has the benefit of having an established set of processes. Up-front capital requirements An advantage associated with franchising is This is an example o. Craig has $60,000 to invest in a new small business. A major reason for success of franchising is Jimmy John's, Which is not a cost of franchising? legal and professional fees b. To better understand the demand for a product or service. the franchisor offering a standard,well-known product or service. To properly develop a franchise system the franchisor must develop the franchise system at three different levels. A franchise system can be used for handling It is most likely that, it may take several years for this business to begin to show a profit, Barrack opens a bagel shop and at the end of each day has five dozen bagels left over that he cannot sell the next day due to health code restrictions. Milkshake Lending Company is a small privately owned firm providing venture capital to small businesses. Which one of the following is not one of the required factors for successful leadership? A franchisee generally receives which of the following when purchasing a business? success will cause another outlet to be opened nearby. d. c. 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. both of the above. Which of the following helps to simplify the difficult site selection process? the franchisee Solved Knowledge Check 01 Which of the following statement Which of the following activities at the franchisor's headquarters office should be the center of attention? d. A CPA whether employees with key skills will stay or leave. to determine the success of the franchise in meeting its overall objectives. Capital advantages C. The franchisor provides little beyond a license to use its trademarked products. D) Many legal disputes d. franchising asset value. False T or F? "When sales continue to grow but are increasing at a decreasing rate" is associated with which stage of the product life cycle? and must be provided to the potential franchisee early in the process. D) Doing Internet research buying a new business What is the primary disadvantage of owning a franchise experienced by a franchisee? The owner may be in trouble with suppliers. All franchisees operating under single-unit franchises own and operate one unit. Which of the following is not included in a partnership agreement? B) Positive relationships with their franchisees On-site management In exchange for an ownership share, small businesses receive financing from a group of investors known as engaging in a continuous business relationship. Franchisee or Franchisor: Who Gets Franchise Control | QVALON E) All of the above, Which of the following aspects would the franchisor control in a business-format franchising situation? pay a fee. D) Data regarding existing units Which of the following statement most accurately describes a franchise channel? There is one thing every franchise system knows. a. brand-name appeal. What is the purpose of ratio analyses of financial statements? a, b, and c only. D. They are most common among automobile and soft drink channels. The "Federal Trade Commission" does not provide information on franchise success. A wholesaler purchases products in quantity from _____ and then resells them to retailers. c. The accounting records of a company are kept separate from its owners. franchisette. All of the above, Have a seller retain a _____interest in the business. franchiser age of the competition's owners. c. a. E) Regret, Performing due diligence may include ________. all of the above, What is the largest source of new business ideas among men? b. Which of the following is often referred to as the franchisee's "bible"? Capital requirements that a potential franchisee must consider prior to becoming part of a franchise system include each of the following except for: Reasons a franchise system would have corporate locations, as well as franchisee locations are shown below, except for: franchisor avoids potential conflict with franchisees that may rise based upon market and site locations. Ellis owns a Subway franchise. Part of the motivation for a franchisor to develop a franchise system is to ensure consistency throughout the business units in the system. There is an established set of process. How much of successful selling consists in simply listening to the prospective buyer? a. The Antitrust Division of the Federal Trade Commission takes legal action against any business it believes has tried to monopolize an industry. Richard orders some Harley-Davidson Trikes for his inventory. The information contained in the daily business intelligence reports becomes the foundation upon which a franchise system builds what? new-new Will the business's mission and vision change? WebQuestion: All of the following are reasons a franchisor may wish to maintain some degree of control and supervision over the franchisee, except to protect the franchise's name and In purchasing an existing business the first question should be: "Why are you selling?". a. What is the largest guaranteed loan she could be granted? C. Increased regulatory scrutiny. The franchise with the most outlets in the United States is. The franchisor provides a system for the franchisee to operate the business. A. b. A Starbucks franchise located inside a Target store is called ___________ franchising. he/she is very straightforward about his/her interest, availability, and financial resources. A. disagreements between the two parties have increased and contract disputes are causing many lawsuits. NOT: asset utilization for the business Changes in zoning which affect the business. reduced concern over future operations. An individual looking to buy a franchise should _________. NOT: marketing and advertising to customers T/F, The buyer of an existing business typically acquires its personnel, inventories, physical facilities, establish banking connections, and ongoing relationships with trade suppliers. franchise The franchisor licenses its trademarked products to franchisees. 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. A franchise is a legal agreement. b. discloses any predecessor to the current business. the franchise B) Consistency Prior job c. Payroll tax. Short-term obligations created by the franchisee in buying supplies, materials or services associated with running the business are referred to as: Often considered the most critical financial component of working capital is, NOT: accounts receivable 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. d. NOT: inventory management and recovery. b. It is structured between single-unit and multi-unit franchises. a. All of these are ways a franchisor makes money; The _________ is the entrepreneur who buys the franchise from the ________. 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. WebThe Federal Trade Commission monitors all of the following activities except the sale of unhealthful foods The Franchise Disclosure Document helps the franchise buyer to make C. Multi-unit franchises require the franchisor to provide greater operational assistance to their franchisees than do they do for single-unit franchises. An understanding of customers buying patterns before the business begins operations. Franchise fees: Which of the following is something that would not be included in the plan? A) Franchisor agreement Chapter 14- Franchising and Purchasing an Existing Business 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. majority procedures are essentially "set in stone.". c. B) Eases the issues of start-up development all of the above, The UFOC contains how many sections: B. He is considering applying to small firms because he knows that small businesses have traditionally added _____ new jobs to the economy. Collecting a percentage of sales from each franchisee the franchisor still maintains a great deal of control. These include all of the following EXCEPT: Two primary points must be considered when a franchisor develops expansion plans for a franchise. WebA franchising strategy whereby a single franchise owns more than one unit in a given area is typically referred to as an area developer strategy T/F. a. b. Which of the following statements is true about franchising? The Consumer Product Safety Act of 1972 sets safety standards for products other than food and drugs. E) None of the above, Franchisors are focused on creating wealth for ________. The product quality is within the perception of the customer and is greatly influenced by the franchise system's server. Upon paying the upfront fee and continuing royalties, the franchisor grants the franchisee the rights to use C) Purchasing power d. training and guidance provided by the franchisor. Business students at universities can work together to provide management counseling to small businesses in their community. Which of the following is a question which can be sidestepped when buying a business? Hobby b. d. The ___________ is a contract linking all franchisees to the franchisor. Studies have shown that the incidence of innovation among small-business workers is ___ among workers in larger businesses. It takes special knowledge and skills to conduct an effective turnaround. 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. What are the four main areas of taxation one must consider when reporting about a franchise's activity? When buying a business, you should do all of the following except, A corporation's senior officers decide how much should be paid out in dividends. A) Self-reflection When one designs a unique good or service, the individual is said to have used a(n) ____approach to starting the business. Which of the following is an intangible asset? WebWhat is usually required for a franchisor to terminate a franchise? d. it can be either franchisor- or franchisee-driven. b. insurance a. Pewterschmidt Company values its inventory reported in the financial statements in terms What is the name of the business agreement Henry would sign? D. Franchising is an American business model that does not work well outside the U.S. a trade restriction clause. T/F, The entrepreneur who enters into a franchising agreement does not acquire the right to use the franchisor's trademark of brand name. Which of the following types of financial ratios measures the ability of the franchise organization to turn sales into profits? Firm's records Who is responsible for these activities and outcomes? E) Not be counted on, A) Provide a significant advantage for your business start-up, All of the following are advantages of franchising except ________. What types of customers does this store attract? B) Research a. What pricing strategy should the firm use? Which of the following is not an ongoing cost of franchises? Which of the following are areas that the potential franchisee may be able to negotiate with the franchisor? A) Guarantees brand recognition Develop strategic plans for the franchise firm. ENT 3172 Chapter 1-12 Terms Flashcards | Quizlet goods. As a franchisee you will benefit from the purchasing power of the franchisor to get lower costs and improved vendor service. Which one below is not one of these tried-and-true approaches for growth? E) None of the above is an exception. B) Termination of the franchise Business related reasons for selling may include all but which of the following? Prior job Firms selling heavy industrial machinery are most likely to use the franchise model to control product distribution. One of the special focus areas of the SBA is to, assist minorities wanting to start or expand small businesses, A business seeking a loan through the Small Business Administration will actually be given a loan through. b. D. In a franchise, one party grants a license to another party to sell a trademarked product or service. D. Reduce uncertainty your financial backer. Franchises are governed by ________ laws and regulations. b. C) Popularity d. new-old, old-old This is the most common form of franchise channel structure. Chapter 6 ent Flashcards | Quizlet What is a realistic number for a sample size when doing market research? The majority of small businesses are managed by, Hamilton has wanted to start a business of his own since he was a small child. The franchisor licenses its trademarked products to franchisees. a. b. E. Is a government tax to register the franchise. C. While the number of franchises has grown, the number of kinds of franchises has remained constant All of the above. training and guidance. In a franchise, two parties are involved, the franchisee and franchisor. Communications between franchisors and franchisees is one-way, performance data that flows from the franchisee to the franchisor. E) Type of product. old-new A. The Clayton Act makes it illegal for competitors to get together and set prices on the products or services they sell. b. Which of the following is true of the risk involved in buying an existing business facing bankruptcy? b. 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. opportunitites. Which of the following is NOT one of the four P's of selling? "Pro forma" accounting statements as used in business financial planning means: a statement of anticipated costs and revenues or change in assets, liabilities and equity based upon prior (operating) financial performance. What crucial element is necessary for the success of co-branding partners? Importance of channel members and nature of product b. What exactly is to be done in each segment? opening product inventory. legal and professional fees 1- Reduced risk of failure. If you are looking to start a business that is creative and is not controlled by others, then franchising is your best option. Which of the following is not an advantage of a franchise? d. The accountant assigns revenues and expenses to specific years before preparing the financial statements. Why is the owner selling? The difference between single-unit and multi-unit franchises is: What helps you identify the customers whose needs your franchise best satisfies? B. B. None of the above, An analysis of the competition should look for ______. E. Single-unit franchises are a very low-cost method of selling. f(t)=t2t+2. time and effort are reduced During the period a patent is in effect, no business or individual can copy or use the patented invention without the patent holder's permission. whichever method the franchisor deems appropriate for a their particular business. 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. How might you describe the professional approach to sales? Franchisees may pay a fee that is separate from the royalty fee, often called a ________, to contribute to a shared advertising fund. E) Employees, A franchisor's record of success can ________. The potential value of any 2- Do not have to find employees Franchising offers all the following benefits for - Brainly.com d. C) Geography old-old. There are four generic categories to classify goods and services. Changes in leasehold conditions. 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? One of the main reasons she may have made the move was. Reno decides to purchase and operate a McDonald's restaurant. Macy because the SBA's primary financial function is to guarantee loans. E) All of the above, Franchisors are ________ to provide operating manuals and training to their franchisees, which are a valuable resource for success. E) Very few franchisors do inspections. B) Business-format franchising John, an entrepreneur, approaches the firm with a proposal. A franchisor's revenue from royalties and selling supplies provide _________ income than that earned from initial franchise fees. green products A. D) Optimism As it pertains to the motivation of franchisees, which statement is generally false? What is the condition of the inventory? Which is not a start-up expense? E. The desired degree of control of franchisees by franchisors is not relevant to the decision by franchisors to use the franchise channel model. He states in the plan, "This business will serve over 400 customers by the end of the year and employ ten full-time employees." Jack owns a franchise. d. The primary administrative costs of administering a franchise program typically include those of: hiring and training salespeople to recruit or solicit prospective franchisees, The recruitment package is part of the franchisor's, initial response to a potential franchisee's inquiry for information about the franchise, The written information provided in the franchise package to a prospective franchisee contains, promotions package and operations materials. your lawyer. Which philosophy of expansion is, as a rule, the best method for franchisors? Regulations that protect consumers include trademarks, zoning, regulations, and consumer protection laws. Which of the following is an advantage to the franchisee? It is always important that you weigh the advantages vs. disadvantages in purchasing a franchise. Supplies d. new-new A regular and continuous fee paid to the franchisor by the franchisee is called: a. Pizza Hut C) Years of experience Which of the following is not a type of franchising according to the text? He feels that the franchisor is hurting his business by forcing him to buy higher priced products from high-priced suppliers. Which major question in his business plan does this statement address? a. The costs of franchises vary significantly. The business arrangement, otherwise called a franchise opportunity, has three major components that constitute the essence of what is generally referred to as a franchise. d. Which of the following things is NOT true about the accounting process? new-new A) Training Developing a plan for the business. The franchisee and franchisor are linked by a bond of voluntary cooperation rather binding contracts. 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. A franchisor typically provides _______ to develop performance management programs, quality controls methods, forecasting, and purchasing of equipment, which are very valuable services that act as guidelines rather than mandates in deciding on a franchise. What's the difference between the sales package and sales playbook? Which of the following agencies will most likely arbitrate this dispute? Add appropriate labels. There are several ways to protect a trademark, as indicated below. Sales records are of very little value to a buyer in evaluating a company's worth. lower new-old. Franchisors sometimes act like a business partner. Externally dedicated to the market, yet internally focused on production, seeking to produce high-volume or high-value product/service while carefully examining any new opportunities for costs/benefits in relation to known strengths of the firm, is a description of which one of the market-focused business strategies identified below. Franchisee operational efficiency is more important than working relationships between franchisors and franchisees Which of the following ratios would be ranked the best? This program is part of the. b. In franchising, the _____ is the firm that originates the idea for a business and develops the operational methods. Which one of the following statements is true? 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. E) All of the above, The formula provided by the franchise does which of the following? d. Which technique is not valid for valuing a company? Which of the following is a true statement pertaining to single-unit franchises? A lawyer Which of the following statements best describes franchise channel structure? A franchisor pays a fee to obtain a franchise. (pg 134) according to Brian Hendricks, what are the 5 "p's" of entrepreneurship. plant a legal restraint of trade. c. new-old, Which of the following are trends creating business opportunities? a. E. Quality control standards. c. Which one of the following is not a major question at the onset? Do you think this was a popular tax? Mary's Models is a successful model airplane store. Test the following hypotheses at the .05.05.05 level of significance. How many of the personnel will remain with the firm? a. inventory Stuart has $50,000 to start a new business. Which of the following issues should detailed in the "Business Experience" section of the Uniform Franchise Offering Circular (UFOC)? The franchisor provides a system for the franchisee to operate the business. It is not uncommon for a buyer to be faced with a franchise fee of 250,000 to 1,000,000. d. Brenda has a small grocery store in a residential neighborhood where she primarily sells staples to the people who live in the area. The term "risk vs. loss" refers to the amount of return for funds invested. Repeat the test using the critical value approach. b. accounts receivable Two parties are brought together by a facilitator, a document called the ______ is the accepted format for satisfying franchise disclosure requirements. NOT: dealing with financial issues such as accounting and finances. 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? a. A) Accounting In this scenario, John is a _____. Which of the following are benefits of purchasing an existing business? The most common form of franchising today is one in whic. the franchisor. C. Franchise agreement c. "The Franchisor, Its Predecessors, and Affiliates" section of the UFOC _________. The implementation of marketing mix variables in franchise channels is less fluid and flexible than in conventional channels. According to the SBA, in 2012 women were 51 percent of the U.S. population, and owned at least ___ percent of all small businesses. D. The challenges managing a franchise channel are fundamentally the same as those encountered in conventional channels. The _____approach indicates the importance of people's awareness of their daily lives for developing new business ideas. Low expectations among franchisees a. b. d. Freddie's Fenders is seeking a loan from the SBA. C. Lodging. 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. What amount is generally considered adequate? D. Real estate. A) Product and trade-name franchising
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