D) Doing Internet research c. economic efficiency? c. The number of jobs provided by franchised businesses is slightly less than those provided by durable goods manufacturing. training and guidance provided by the franchisor. This is the most common form of franchise channel structure. and & H_0: \sigma_1^2 \leq \sigma_2^2 \\ a. This desire is referred to as. d. Which technique is not valid for valuing a company? B. It is so successful that she has decided to allow others to use her business name, materials, and methods in operating their own business for a fee. franchisette. B) Failure your lawyer. Four factors are important in determining the size and shape of a primary service area (PSA). What is the effect of such a tax on all of the above, The UFOC contains how many sections: c. Which of the following statements regarding franchisors' long-term success are true? Which of the following would not be a good reason to start a small business? After all of your investigation into a franchise, the final decision should be up to b. A ________ specializes in selling buinesses. Not coincidentally, these issues have become more prevalent and evident with the advent of When buying a small business you need to know all of the following items except: Depreciation. E. Single-unit franchises are a very low-cost method of selling. E) None of the above, All of the following are factors of franchise cost except ________. a. D. System to network with competing franchises. company name. 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. Which of the following are resources that an entrepreneur can typically use to find a business for sale? a. There are approximately ___ businesses in the United States. he/she is very straightforward about his/her interest, availability, and financial resources. provide continuing aid and a guidance to the person buying the franchise. invest money in the operation. Franchisees have the option of using the logo and symbols of the franchisor. What is the purpose of ratio analyses of financial statements? A. opening product inventory. Which one of the following is not part of a franchise business arrangement? When Reno purchases the McDonald's she will be expected to supply, labor and capital and will own and operate the outlet. B) Calling on existing franchisees Supplies D. They are most common among automobile and soft drink channels. B. b. E) Employees, A franchisor's record of success can ________. b. c. c. success will cause another outlet to be opened nearby. Firms selling heavy industrial machinery are most likely to use the franchise model to control product distribution. B) Be a concern for a franchisee C. Potential to reduce distribution costs A. Which of the following is an intangible asset? Perhaps the greatest advantage of buying a franchise, as compared to starting a new business or buying an existing one, is that the franchisor will usually provide both training and guidance to the franchisee. As a franchisee you will benefit from the purchasing power of the franchisor to get lower costs and improved vendor service. franchising Darrel's Donuts has been operating quite successfully for two years. of dollars instead of units. The business that represents 99.7 percent of all employers in the United States is a. c. weaknesses. A. a. What is the effect on economic This program is part of the. ( ) usually provides the starting-point of data collection when conducting marketing research. WebFrianchisees are likely to be more successful when the franchisor provides high-quality products and helps with finding locations. Changes in zoning which affect the business. the franchisor still maintains a great deal of control. Identify which generic category fits most franchise systems below. WebThe purchaser of a franchise is called the franchisor. b. Identify an accurate statement about buying an existing business. A) The franchisor Evaluating franchise opportunities include finding out more about which of the following? B) Research a. D) Quality assurance Leticia has always wanted to own her own restaurant but has read that restaurants have a very high failure rate. Which practice is a competitive concern for franchisees? Entitles the franchisee to business operational advice. Adequate frontage is a necessity for most retail businesses. provide professional management training to the unit's staff. b. a. Which of the following should the potential entrepreneur consider in developing a plan of operation? Entrepreneurs should asses their skills and interests. a. Most franchisors have a ________ page where potential franchisee can contact them for more information. Potential franchisees should examine the franchisor's package and balance the cost and the _________ being offered. Marilyn and Macy are arguing about the primary financial function of the Small Business Administration. a legal restraint of trade. E) All of the above, The formula provided by the franchise does which of the following? C) In shopping malls track record of the other franchisees as proof of success According to the text, the most important reason why franchisors adopt franchise channels is: A. What is the owner's personal net worth? d. 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. In the franchise system's "Bankruptcy" section of the UFOC, the company must disclose which of the following? prepaid expenses Policies and procedures for running the business. The Federal Trade Commission regulates franchise. In the "_________" section of the UFOC, the franchisor must disclose all fees that are charged to franchisees. c. How does Auntie Anne's ensure that new franchisees understand the company's operational approach? Advertising Franchising offers all the following benefits for - Brainly.com C) Ensures ongoing support 100, Which of the following costs add to the cost of franchising? Which one below fits the description of----goods or services that are frequently purchased, usually are low-to- competitively priced, and staples, emergency or impulse buys. d. a. If a franchise system is struggling, not achieving long-term success. Why might co-branding be beneficial for a mature market? b. The "Trademarks" section of the UFOC details ___________. They have heard that the disadvantages of small businesses include all of the following except. E) All of the above, Products and services in a franchise may not be altered, added, or dropped without ________. NOT: asset utilization for the business Franchise agreement usually allow the franchisee to operate the business _________. new-new, new-old In the United States, ___ account(s) for 97.5 percent of all identified exporters and produce(s) 31 percent of export value. Companies that invest in small businesses. b. All of the following are a new type of franchising opportunity except, Any costing saving resulting from franchises purchasing power helps to offset other costs , such as franchise, Start - Up Standard require of franchisees may include which of the following, Products and service in a franchise may not be altered, added, or dropped without, in many instances, products or ingredients in a franchise must be purchased from, As a franchise one will benefits from the purchasing power of the franchisor to get, a provide a significant advantage for a business start-up, all of the following are advantages of franching except, all of the following are selected franchise fee and cost accrording to the text except, Franchisors are to provide operations manuals and training to their franchisees , which are valuable resource for success, Fundamentals of Financial Management, Concise Edition, Daniel F Viele, David H Marshall, Wayne W McManus, Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield. d. goods. Which one of the following is not one of the levels for development? Which of the following is a true statement pertaining to single-unit franchises? As it pertains to the motivation of franchisees, which statement is generally false? A corporation pays taxes both on its income and on the amount it pays out in dividends, it faces very little government regulation. quality of the competition. Macy because the SBA's primary financial function is to guarantee loans. b. Communications between franchisors and franchisees is one-way, performance data that flows from the franchisee to the franchisor. A major reason for success of franchising is b. If you are looking to start a business that is creative and is not controlled by others, then franchising is your best option. Foundations of Business: Chapter 5 Flashcards | Quizlet The franchisor says it has the power to control which suppliers the franchisees use due to implied powers in the franchise agreement. Terry's is a. Characteristics of a small business would include all of the following except. all of the above. There is no need for legal representation when entering into a franchise agreement. d. A) Training The franchisor licenses its trademarked products to franchisees. must be provided to the potential franchisee early in the process. buying a new business C. Franchise agreement 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 all of the above. A significant amount of up-front cash is required to begin operations. Which of the following statements regarding the franchise fee are correct? E) Very few franchisors do inspections. A) Franchisor agreement A partnership agreement identifies the type and value of the investment contributed by each partner. Which of the following are tasks that need to be completed by a new owner during the transition period from a former business to a new business? Franchise fees: The "right questions" the prospective small business owner should ask about a franchise deal with Which of the following is true regarding the costs of franchises? collaboration with suppliers through Internet, NOT: franchisors new-old To better understand the demand for a product or service. c. a. The ___________ is a contract linking all franchisees to the franchisor. The franchisee and franchisor are linked by a bond of voluntary cooperation rather binding contracts. both of the above. C. In a franchise, parties are independent. The franchisor might negotiate a complete different deal with the franchisee in order to get started with a self-sufficient operator. Business format franchises are prevalent in which of the following businesses? is the principal governing mechanism of the franchisor-franchisee relationship. Richard orders some Harley-Davidson Trikes for his inventory. Which of the following is true about co-branding? Consideration occurs when one party in a contract offers or agrees to do something and the other party accepts. all of the above, Coming up with a unique good or service is a _____approach, while adapting something that is currently on the market or extending the offering to an area where it is not presently available is a(n) _____approach. time and effort are reduced Godfrey has just graduated from business school and is seeking employment. E. Is a government tax to register the franchise. Many fees are must be paid regardless of ________. Capital advantages C. Nature of product and number of channel members Which major question in his business plan does this statement address? Obtain needed training from franchisees Which of the following organizations would most likely give her the help she needs? Jennifer and Raleigh are considering starting a small business and are weighing the pros and cons of doing so. c. Buildings discloses any predecessor to the current business. C. Generally, franchise marketing channels are more closely knit (i.e., closer relationships) than conventional channels. Competitor factors in a buying decision do not include As a class assignment, business students were told to prepare a business plan for a business they would like to own. 3 reasons for buying an existing business. The advantages of franchising include: 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. 40%, Which franchise is not included in the top ten franchises? A well-established business model a. Chance, What is an often overlooked asset when acquiring a new business? journal, general ledger, financial statements. Which descriptive statement is NOT one of the legal ways of protecting a trademark? 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. Potential franchisees should evaluate franchisors' operations based __________. Solved All of the following are reasons a franchisor may - Chegg Opening a franchise business has a great deal in common with _________. The franchisor provides a system for the franchisee to operate the business. The most important area to examine prior to purchasing a business is company profitability. b. Which of the following is not a disadvantage of a major franchise? one time franchise fee and monthly royalties based on sales. inventory Samantha would like to get a small business loan from the SBA. poll tax that required each person to pay a flat a. Which type of franchisor manual is specifically focused to this purpose? Which one of the following is NOT an advantage of franchising for the franchisee? 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. the market. True or false: One advantage of buying an existing business instead of a franchise is that an existing business already has an established cash flow. When buying a business, competition must be investigated because Which of the following types of financial ratios measures the ability of the franchise organization to turn sales into profits? The planner will want to find the answers to all of the following questions except. d. awareness of some of the unfilled promises from franchisors, Which of the following costs do not add to the cost of franchising? Which of the following things is NOT true about the accounting process? c. asset pricing. About fifteen percent of all marriages in North America fail. H0:1222Ha:12>22\begin{aligned} Marilyn argues that the SBA's primary function is to lend money. The ______ is a firm that originates the idea for a business and develops operational methods to run the business. The franchisor provides a system for the franchisee to operate the business. Up-front capital requirements Which one of the following statements is true? He wants the business to succeed. It is uncommon for a franchisor to handle the national and regional media purchasing for a franchisee. The market research should be independent of the franchisor. Education courses Entitles the franchisee the right to open a business in a given area. Leticia would like to start a business and has investigated starting her own or buying a franchise. d. A. Franchisors provide significant operational assistance to franchisees. help out with financial assistance. Negotiating a deal to acquire exactly what is required from the operation. D) Federal Disclosure Document When will the activities be started and completed? Entrepreneurs tend to work harder and take moderately greater risks than persons working as employees in someone else's firm. c. B) Consistency Some franchisors provide different levels of support depending on how much the franchisee is willing to pay. D. There is no difference, they are different labels for the same form of franchise channel. Franchising offers all the following benefits for franchisers except. Generally, the larger and more successful the franchisor, the greater the franchise fee that is charged. T/F, The buyer of an existing business typically acquires its personnel, inventories, physical facilities, establish banking connections, and ongoing relationships with trade suppliers. It is a channel used exclusively for distribution of consumer durable goods. The business franchise model is always an appropriate model to ensure a high degree of control, regardless of the industry. insurance McDonalds is the only franchise available for ownership internationally. c. True or false: A poorly performing or disruptive franchisee detracts from the overall operations as well as taking time and effort of the franchisor away from the business of growing the brand. A. Which of the following is an advantage to the franchisee? They meet with a business planner who helps them compile a business plan. the franchise. Juan has been awarded a franchise in an industry in which the franchisor has licensed him to sell and distribute its product to retailers. All of the following are disadvantages of franchising for the franchisee, except for: typically operate as a non-unionize business establishment. machinery. E) None of the above, Franchisors are focused on creating wealth for ________. Debt Service b. c. Franchising and franchise channels continue to grow dramatically. f(t)=t2t+2. None of the above, An analysis of the competition should look for ______. These are questions directly associated with which phase of marketing strategy for a franchise system? 41 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. 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. b. sales taxes, business taxes, property taxes, employee taxes. WebWhat is usually required for a franchisor to terminate a franchise? Franchisors sometimes act like a business partner. b. It is always important that you weigh the advantages vs. disadvantages in purchasing a franchise. A franchisor pays a fee to obtain a franchise. Brent and Wendy plan to open a new business. c. What crucial element is necessary for the success of co-branding partners? Portica knows the customers of her hat shop by name and knows each of their preferences. Which of the following does Smoothie King founder Stephen Kuhnau credit as the reason for his success? 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. Good cause B. Why is the business being sold? A franchise is a business that markets a product or service developed by a franchisor, typically in the manner specified by the franchisor. a. All can be sidestepped. B. C) Popularity A franchise system can be used for handling In purchasing an existing business the first question should be: "Why are you selling?". Intro to Business- Chapter 5 Flashcards | Quizlet A) They may be announced or unannounced. pay a fee. Brenda has a small grocery store in a residential neighborhood where she primarily sells staples to the people who live in the area. c. b. It is structured between single-unit and multi-unit franchises. Rent d. 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. competition may be spending more money on advertising than you. B. old-new control exercised by the franchisor Test the following hypotheses at the .05.05.05 level of significance. Which of the following is true regarding inspections conducted by franchisors? This demonstrates which advantage of a small business? This is an example o. Craig has $60,000 to invest in a new small 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. A(n) ___________ is the firm that originates the idea for the business and develops the operations methods. B) They are always surprise inspections. a deferential sale of business clause. In many instances, products or ingredients in a franchise must be purchased from ________. b. B. E) Local publicity campaigns. Which of the following small businesses could be categorized as being in the distribution industry? An ongoing entity often has a higher purchase price due to __________. E) All of the above. Offer new products/services in new territories to new customers, One who owns and operates more than one franchise unit is known as a, NOT: Area Developer d. The franchisor owns the trademark and business model. C) Operations There are several ways to protect a trademark, as indicated below. b. She is concerned she may not be given a loan and researches the subject, discovering that in 2013, the SBA data showed that women-owned businesses are. B. Which of the following is true about the serious prospective franchisee? What helps you identify the customers whose needs your franchise best satisfies? to determine the success of the franchise in meeting its overall objectives. Reno decides to purchase and operate a McDonald's restaurant. payment of a fee. equipment. d. "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. all of the above. Which of the following types of businesses benefit from being located near competitors? 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. The prospective investor should get as much information as possible on the franchisor. d. Automotive c. What factor generally determines which co-branding method is chosen by a franchisor? Which of the following is not an ongoing cost of franchises? Web4-family background. All of the following are a new type of franchising opportunity except ________. Generally, franchise marketing channels are more closely knit (i.e., closer relationships) than conventional channels.

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