In this scenario, John is a _____. d. 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. D) Quality assurance use of private labels to brand or trademark product or service. Suggests the franchisor provides relatively little in the way of management assistance to the franchisees. Which of the following does Smoothie King founder Stephen Kuhnau credit as the reason for his success? Regarding the issue of control of franchisees by franchisors, which of the following is most accurate? Which of the following types of financial ratios measures how well a franchise meets its short-term debts or financial obligations? green products Which of the following statements regarding franchisors' long-term success are true? Who is responsible for these activities and outcomes? C) Never provide help for start-up About how much work should she expect to do to make the franchisee successful? b. 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. Sales tax. A Starbucks franchise located inside a Target store is called ___________ franchising. Which franchisor manual provided by the franchisor to new franchisees is referred to as "the bible?". C. Training. The franchise distribution system is composed of approximately _________ franchise business establishments that provide more than 11 million jobs. management and training. company name. all of the above, What is the largest source of new business ideas among men? Pay for all physical assets (e.g., equipment and building), needed to operate the franchise. Portica knows the customers of her hat shop by name and knows each of their preferences. The motivation of franchise channel members has less to do with cooperation and partnerships than in conventional channels. buying a new business c. Why might co-branding be beneficial for a mature market? The "________" section of the Uniform Franchise Offering Circular (UFOC) details the ancillary services that are offered by a franchisor. C. In a franchise, parties are independent. Which of the following are benefits of purchasing a franchise? 23 b. What exactly is to be done in each segment? Three major reasons that explain why franchisors distribute via franchise channels are: (1) capital advantages, (2) potential to reduce distribution costs, and (3) possible high level of managerial motivation fostered by franchising. 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. You stop by a Carl's Jr. fast food restaurant and notice that they also have Green Burrito Mexican food. C. Franchise fee. "When sales continue to grow but are increasing at a decreasing rate" is associated with which stage of the product life cycle? d. your accountant. The ___________ is a contract linking all franchisees to the franchisor. Firms selling heavy industrial machinery are most likely to use the franchise model to control product distribution. payroll When Reno purchases the McDonald's she will be expected to supply, labor and capital and will own and operate the outlet. D) The community C. Is usually a one-time flat fee paid by franchisees to franchisors. All of the following are true about small business except. poll tax that required each person to pay a flat insurance Jennifer and Raleigh are considering starting a small business and are weighing the pros and cons of doing so. Give the accounting assumption that is most applicable to each of the statements. fast and selective distribution of products. a. The individual who arranges for a dealer to handle a specific product or service under certain mututally agreed upon conditions is known as the _____. The International Franchise Association is ________. Which of the following organizations would most likely give her the help she needs? D) Promotional support Which of the following is not a disadvantage of a major franchise? C. While the number of franchises has grown, the number of kinds of franchises has remained constant c. If he seeks the average-size SBA-guaranteed business loan he will borrow, Money invested in small, new, or struggling firms that have the potential to become very successful is called. C. Multi-unit franchises require the franchisor to provide greater operational assistance to their franchisees than do they do for single-unit franchises. B. machinery. b. a. C) Any suppliers Ability to achieve a good golf score while making sales to prospective franchisees. a. True or false: A disadvantage of buying an existing business is that operating processes and policies have already been established. C) Years of experience accounts receivable Freddie's Fenders is seeking a loan from the SBA. D. Usage tax. T/F, A franchise is typically attractive because it offers training, financial assistance, and operating benefits. _________ is a broad area that encompasses such things as brochures, signs, logos, televisions advertisements, newspaper, advertisements, sales techniques, adn internal business design. What changes will be made? B. a. Franchising offers all the following benefits for - Brainly.com He has read about the success rates of franchises and the success rates of start-up businesses. Jeremy has written a business plan for the business he would like to open. goods. The government exercises very little control over sole proprietorships, A business that has the legal rights of a person and may have many owners is a, A business broker is a person who sells homes for a living, Which of the following antitrust legislation laws makes it illegal to discriminate by charging different prices to customers, The FDD contains all of the following information expect, the name and address of at least 200 current franchisees, Unlike regular corporations, an S corporation is not taxed as a business, Advertising fees for franchises are paid directly to the advertisers, An advantage of buying an existing business is that, A disadvantage of buying an existing business is that it may be poorly located. The difference between single-unit and multi-unit franchises is: brand-name appeal of the franchise new-old, old-new, Starting a business by adapting something already on the market is called what approach? What are they? 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. d. D. Reduce uncertainty B. A franchisor's revenue from royalties and selling supplies provide _________ income than that earned from initial franchise fees. B. D) Initial inventory D) Unable Which of the following are ways in which a franchisor earns profits? d. Prior job Companies that invest in small businesses. 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. Henry approaches her about operating his own business under the terms above. Which of the following is not an ongoing cost of franchises? sales taxes, business taxes, property taxes, employee taxes. 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. d. BLAW CH 35 Flashcards | Quizlet insurance c. b. Business format franchises are prevalent in which of the following businesses? 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. a. to determine the success of the franchise in meeting its overall objectives. Education courses, What is the largest source of new business ideas among women? Franchisors sometimes act like a business partner. A wholesaler purchases products in quantity from _____ and then resells them to retailers. Fran's Fancy Frocks, a retail clothing store, may not exceed ___ in annual sales to qualify as a small business. asset pricing. franchisor. There is no need for legal representation when entering into a franchise agreement. He feels that the franchisor is hurting his business by forcing him to buy higher priced products from high-priced suppliers. E) Very few franchisors do inspections. If you decide to purchase a franchise, you will have to pay. d. new-old 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. There is an established set of process. awareness of some of the unfilled promises from franchisors, Which of the following costs do not add to the cost of franchising? B. A ____ is a system of distribution that enables a supplier to arrange for a dealer to handle a specific product or service under certain mutually agreed upon condtions. Which of the following should the potential entrepreneur consider in developing a plan of operation? It is a channel used exclusively for distribution of consumer durable goods. Degree of control and importance of channel members the market. all of the above. Juan is most likely a franchisee in the ___ industry. There are few resources for franchise research. Franchisors benefit from the franchise agreement because they have. If you are looking to start a business that is creative and is not controlled by others, then franchising is your best option. Chapter 4 Franchises and Buyouts Assessment Flashcards B) Marketing As it pertains to the motivation of franchisees, which statement is generally false? Reno decides to purchase and operate a McDonald's restaurant. d. Uniqueness in a product or service can be demonstrated through a new-new approach or a new-old approach. c. The two main reasons for failure in business are: NOT: inadequate business plan and poor management. a. c. d. Which of the following is not an element of a tort? Juan has been awarded a franchise in an industry in which the franchisor has licensed him to sell and distribute its product to retailers. A. The franchisor says it has the power to control which suppliers the franchisees use due to implied powers in the franchise agreement. Franchisors often determine a franchisee's likelihood of success by looking at two things. Sylvia has an SBA-guaranteed business loan for the average life of such loans. The Franchise Disclosure Document helps the franchise buyer to make a knowledgeable purchase. The individual who buys the franchise is the Changes in leasehold conditions. Which of the following activities at the franchisor's headquarters office should be the center of attention? the franchisee's revenue stream is fairly consistent because franchisers pay fixed fees and B) Research a. ENT 3172 Chapter 1-12 Terms Flashcards | Quizlet Which of the following types of financial ratios measures the ability of the franchise organization to turn sales into profits? Spend a significant amount of time being visible. The "Federal Trade Commission" does not provide information on franchise success. b. A. D) In military bases a. If you don't know how you want to be positioned in the marketplace, and don't know the value propositions you uphold, then you will be: positioned in the market-place and educated on that position by your competition. E. Possible high level of managerial motivation fostered by franchising. 41 c. old-old E. Single-unit franchises are a very low-cost method of selling. old-new According to the SBA, in 2012 women were 51 percent of the U.S. population, and owned at least ___ percent of all small businesses. The most significant advantage for a franchisee is the increased probability of success. It is structured between single-unit and multi-unit franchises. A) Established multiple franchises E. None of the above. b. Prior job 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. Godfrey has just graduated from business school and is seeking employment. c. Which of the following are areas that the potential franchisee may be able to negotiate with the franchisor? Franchising and franchise channels continue to grow dramatically The acutal cost of "opening the doors" of a franchise establishment can be as high as $200,000. The elimination of time and effort associated with starting a company is an advantage of acquiring an ongoing venture. 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. D) Unity Sound franchisors provide a significant quantity and excellent quality of start-up assistance to new franchisees, as well as ongoing education and support for established ones. B. Which one of the following is not one of the levels for development? 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. b. Low expectations among franchisees True or false: A franchisor and a franchisee are both dependent on each other for success. you. One of the more interesting ratios for franchising is the Location Selection Ratio or Sales/Costs ratio. none of the above. payment of a fee. c. What is your conclusion using the p-value approach? B) Be a concern for a franchisee D. Limited independence of the franchisee. C) Fixtures 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. Sales records are of very little value to a buyer in evaluating a company's worth. Solved Knowledge Check 01 Which of the following statement Because of disputes between franchisors and franchisees, a program was instituted to arbitrate them. When will the activities be started and completed? E) Type of product. Franchise fees: E) Brand, Subway restaurants can be found ________. They meet with a business planner who helps them compile a business plan. old-new WebProbably the earliest example of franchising in the United States is most likely to be: McCormick Harvesting Machine Company. 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. Marilyn argues that the SBA's primary function is to lend money. The way to approach a new business venture is to think up a good or service that is unique. The "Trademarks" section of the UFOC details ___________. One wants to make sure they are not buying into a fad but a viable long-term business. Which of the following statements best describes franchise channel structure? can learn about the franchise from the ground up. How many of the employees will remain? B) Termination of the franchise old-old. Compensate the franchisee for the use of its trademark. loss of freedom and control as franchise system grows. proven track record. 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 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. a. C) Territory \end{aligned} The implementation of marketing mix variables in franchise channels is less fluid and flexible than in conventional channels. Which of the following is not one of those statements? A) Self-reflection In a franchise, two parties are involved, the franchisee and franchisor. D. They are most common among automobile and soft drink channels. WebStudy with Quizlet and memorize flashcards containing terms like All of the following are a new type of franchising opportunity except, Any costing saving resulting from franchises A well-established business model c. The most common form of business ownership in the United States is the corporatio. he can ensure that the new stores are operated according to his own standards through the franchise agreement. 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. Property, plant, and equipment is recorded at cost (minus any accumulated depreciation) a. test review chapter 7 Flashcards | Quizlet Entitles the franchisee the right to open a business in a given area. The term "upside gain and downside loss" refers to the profits the business can make and the losses it can suffer. What crucial element is necessary for the success of co-branding partners? Chapter 14- Franchising and Purchasing an Existing Business The business that represents 99.7 percent of all employers in the United States is a. a. CHAPTER 2 Flashcards | Quizlet Which of the following are resources that an entrepreneur can typically use to find a business for sale? B) Contractual obligations One downside for franchisors participating in franchise channels is: E) All of the above, Which of the following aspects would the franchisor control in a business-format franchising situation? The costs of franchises vary significantly. disagreements between the two parties have increased and contract disputes are causing many lawsuits. d. The control issues are: 1. A. c. Which technique is not valid for valuing a company? B) Calling on existing franchisees Which of the following antitrust legislation laws makes it illegal for competitors to get together and set prices on the products or services they sell? to generate data which can be used to accumulate working knowledge. Brenda has a small grocery store in a residential neighborhood where she primarily sells staples to the people who live in the area. Trade associations for the industry. 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. d. When buying a small business you need to know all of the following items except: opening product inventory. Which of the following statement most accurately describes a franchise channel? Depreciation. True. Reno is a. age of the competition's owners. Which of the following agencies will most likely arbitrate this dispute? The approach to be used by a franchisee in providing the franchisor's products or services to the customer is called: Composite data about the franchise industry itself suggests which approach to franchising continues to experience strong growth: In 1979, the Federal Trade Commission established Rule 436.1, also known as the Franchise Disclosure Act, for the purpose of: diminishing illegal and unethical practices. Four factors are important in determining the size and shape of a primary service area (PSA). D. The challenges managing a franchise channel are fundamentally the same as those encountered in conventional channels. What is the first step to good site selection? it can be either franchisor- or franchisee-driven. NOT: inventory management and recovery. They have heard that the disadvantages of small businesses include all of the following except. Decide whether the following statement makes sense or not Explain your reason. the owner's reason for selling. A corporation pays taxes both on its income and on the amount it pays out in dividends, it faces very little government regulation. b. According to the U.S. Census, ( ) are the fastest growing segment of small business ownership today. provide continuing aid and a guidance to the person buying the franchise. NOT: Multi-unit Franchisee. & H_{\mathrm{a}}: \sigma_1^2>\sigma_2^2 All of these are ways a franchisor makes money; Potential franchisees should examine the franchisor's package and balance the cost and the _________ being offered. a. C. Lodging. T/F, One drawback of becoming a franchisor relates to possible new restrictions as a requirement for contract renewal. Which one of the following tasks is not one of these six major organizational development tasks? The ability to leave the venture if an entrepreneur does not enjoy the business is severely limited. b. whichever method the franchisor deems appropriate for a their particular business. Which philosophy of expansion is, as a rule, the best method for franchisors? c. The downsides for franchisees participating in franchise channels include all of the following except: Which of the following statements is true regarding, business format franchises? D) All of the above are types of franchising. B) Consistency majority Which of the following is true of the risk involved in buying an existing business facing bankruptcy? Identify the unique aspects to purchasing an existing business. franchises have a very high success rate compared to other small businesses. Potential franchisees should evaluate franchisors' operations based __________. A. He has misjudged, In order to operate a successful small business, the entrepreneur should be most concerned with, Jeff Katz, the founder of Orbitz,Inc., when speaking about new businesses recently said, "A flat checkbook is the mother of invention." new competition may reduce market share. 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? The information contained in the daily business intelligence reports becomes the foundation upon which a franchise system builds what? He states in the plan, "This business will serve over 400 customers by the end of the year and employ ten full-time employees." 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. Which descriptive statement is NOT one of the legal ways of protecting a trademark? Many fees are must be paid regardless of ________. b. C. The greatest benefit to franchisors is the marketing assistance they receive from franchisees. B. Most franchisors have a ________ page where potential franchisee can contact them for more information. This is a ___ business. The extra value a business can command in a sale is known as a. it may be purchased at a bargain price. c. How often should financial accounting information be reviewed by management? Supplies Up-front capital requirements John, an entrepreneur, approaches the firm with a proposal. A. new-old, old-old Why do most franchisees choose to go into business with a franchised company? 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 B. In many instances, products or ingredients in a franchise must be purchased from ________. Which of the following is a disadvantage for the franchisor? The franchisor licenses its trademarked products to franchisees. c. D. Uniform Code of Justice (UCJ) The franchisor is the second party to the franchise agreement and is the owner of the unit or territory rights. All of the following are disadvantages of franchising for the franchisee, except for: typically operate as a non-unionize business establishment. This means that it is a riskier purchase than the purchase of a franchise. alternative energy An advantage associated with franchising is
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