The franchise with the most outlets in the United States is. Property, plant, and equipment is recorded at cost (minus any accumulated depreciation) Develop strategic plans for the franchise firm. According to the SBA, in 2012 women were 51 percent of the U.S. population, and owned at least ___ percent of all small businesses. A trial period of at least 3 years C. Court permission D. Notice to the the franchisor A major reason for success of franchising is T/F, One benefit of becoming a franchisee is sharing a profits with the franchisor. The category most franchise systems are in is the one that has focus on product or service qualities or characteristics with prices being a second-level or a lower order concern to the purchaser. d. All of the following are true about small business except. Buildings Which of the following are reasons entrepreneurs should conduct their own market research? 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. Master franchises do not allow individuals and organizations to buy the right to subfranchise within a delineated geographic territory. Brent and Wendy plan to open a new business. C) Purchasing power c. whichever method the franchisor deems appropriate for a their particular business. the owner's reason for selling. a. B. A) Franchisor agreement The franchise's time frame. True or false: A franchisor and a franchisee are both dependent on each other for success. a. Business related reasons for selling may include all but which of the following? B) Termination of the franchise 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) Themselves Which one of the following is not a major question at the onset? CHAPTER 2 Flashcards | Quizlet (Check all that apply.) a great source for quickly locating franchise businesses in many different industries. c. The Consumer Product Safety Act of 1972 sets safety standards for products other than food and drugs. competition may be spending more money on advertising than you. Which of the following is NOT a component of a properly developed franchisor plan? There are six major organizational development tasks required of a franchisor to develop from a single unit firm into a growing franchise system. a. When will the activities be started and completed? d. Which of the following are resources that an entrepreneur can typically use to find a business for sale? Business students at universities can work together to provide management counseling to small businesses in their community. There is one thing every franchise system knows. What pricing strategy should the firm use? Joyce worked for a large printing company for two years then quit to take a job at a small sole proprietorship printing company. Identify an accurate statement about buying an existing business. b. A(n) _______ _______ is a basic contract generated by a franchisor for all franchisees. Reviewing personnel of the business about to be purchased is important in order to determine Education courses, What is the largest source of new business ideas among women? Franchisee operational efficiency is more important than working relationships between franchisors and franchisees on their support for important areas such as accounting, marketing, and training. Marilyn argues that the SBA's primary function is to lend money. invest money in the operation. a. Ch.16 Flashcards | Quizlet C) Operations The "Restrictions on What the Franchisee May Sell" section of the UFOC describes ____________. guidance from the franchisor Terry's Tires made just under $750,000 last year, according to the Small b. the franchisor still maintains a great deal of control. b. What is your conclusion using the p-value approach? What is the key to convincing someone to purchase your franchise, product, or service? There is no need for legal representation when entering into a franchise agreement. What is the primary disadvantage of owning a franchise experienced by a franchisee? It takes special knowledge and skills to conduct an effective turnaround. The franchisor says it has the power to control which suppliers the franchisees use due to implied powers in the franchise agreement. a. Can you become a millionare by buying this business? Sylvia has an SBA-guaranteed business loan for the average life of such loans. Which of the following statements most accurately describes the success rate of franchises? A) Franchise Disclosure Document amount to the government independent of his or her d. procedures are essentially "set in stone.". a. d. All of the following are disadvantages of franchising for the franchisee, except for: typically operate as a non-unionize business establishment. Changes in zoning which affect the business. franchiser. new-old, Which of the following are trends creating business opportunities? 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. Which one below is not one of these tried-and-true approaches for growth? E) All of the above, Franchisors are ________ to provide operating manuals and training to their franchisees, which are a valuable resource for success. C. Lodging. Which is not a key question to ask when buying a business? new-new The franchisor licenses its trademarked products to franchisees. c. franchisette. franchisor. Automotive Which one of the following tasks is not one of these six major organizational development tasks? An ongoing entity often has a higher purchase price due to __________. Because of disputes between franchisors and franchisees, a program was instituted to arbitrate them. An advantage associated with franchising is Entrepreneurs should asses their skills and interests. a. A) Type of franchise If you decide to purchase a franchise, you will have to pay. A franchise system can be used for handling H0:1222Ha:12>22\begin{aligned} c. c. Approximately what percentage of food franchises are co-branded units? Several years ago the British government imposed a A) Fully understanding the FDD of the franchise company the market. The two main reasons for failure in business are: NOT: inadequate business plan and poor management. brand-name appeal. Which technique is not valid for valuing a company? Which of the following is true regarding inspections conducted by franchisors? Chance b. proven track record. What types of customers does this store attract? Which of the following is NOT one of the four P's of selling? the competition in the area. A) Success 20% Capital advantages Changes in leasehold conditions. Ch. 5 business Flashcards | Quizlet d. D. Number of channel members and degree of control. Selling a franchise to the franchisee b. b. B) Franchisee Disclosure Document Which of the following businesses would most likely be included in the production industry? 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. The costs of franchises vary significantly. "When sales continue to grow but are increasing at a decreasing rate" is associated with which stage of the product life cycle? A lawyer Mary's Models is a successful model airplane store. collaboration with suppliers through Internet, NOT: franchisors Franchisors must have a high-quality support The ______ is a firm that originates the idea for a business and develops operational methods to run the business. D) Doing Internet research Automobile dealerships and ___ were the primary uses for franchises in the early days of franchise agreements. A. c. Franchisees have the option of using the logo and symbols of the franchisor. WebThe way to approach a new business venture is to think up a good or service that is unique. Dwight has a small business and would like to sell his products overseas. Does a physical count correspond with the book count? 2- Do not have to find employees Which one of the following is not part of a franchise business arrangement? B) Business-format franchising the sales package is used by the franchisor to give a prospective franchisee a good sales presentation; the sales playbook helps the salesperson sell to customers. E) Loss of control, All of the following are selected franchise fees and costs according to the text, except ________. Terry's Tires made just under $750,000 last year, according to the Small Business Administration. Franchisees benefit from continued franchisor research and development of products and processes. The term "upside gain and downside loss" refers to the profits the business can make and the losses it can suffer. equity? old-new Frianchisees are likely to be more successful when the franchisor provides high-quality products and helps with finding locations. d. The individual who arranges for a dealer to handle a specific product or service under certain mututally agreed upon conditions is known as the _____. Freddie's Fenders is seeking a loan from the SBA. Franchising and franchise channels continue to grow dramatically. 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 if employees are leaving, will enough remain to operate the business. Competitor factors in a buying decision do not include none of the above. The difference between single-unit and multi-unit franchises is: c. Franchisee or Franchisor: Who Gets Franchise Control | QVALON Often, strategic initiatives fail because: They are seen as extra work to be accomplished in addition to existing work. Richard has a motorcycle and ATV store. C. The franchisor provides little beyond a license to use its trademarked products. D. The challenges managing a franchise channel are fundamentally the same as those encountered in conventional channels. His customers often talk about trikes. Which one of the following is NOT an advantage of franchising for the franchisee? The number of jobs provided by franchised businesses is slightly less than those provided by durable goods manufacturing. The product quality is within the perception of the customer and is greatly influenced by the franchise system's server. E) Brand, Subway restaurants can be found ________. c. What is the first step to good site selection? E) All of the above, The term "FDD" stands for which of the following? saleable value. franchisor c. As a class assignment, business students were told to prepare a business plan for a business they would like to own. d. A franchise's economic figures must be recorded, then transferred and balanced before final calculations can be determined. Brenda has a small grocery store in a residential neighborhood where she primarily sells staples to the people who live in the area. Sarah has opened her own cosmetology business in a small shopping center with a lot of foot traffic. 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 franchisee and franchisor are linked by a bond of voluntary cooperation rather binding contracts. This resulted in the passage of the Uniform Franchise Offering Circular (UFOC). Which of the following are benefits of purchasing a franchise? BLAW CH 35 Flashcards | Quizlet d. to generate data which can be used to accumulate working knowledge. Many franchisors require potential franchisees to work for an established franchisee for a period of time because they _________. 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) Recognition Entitles the franchisee to business operational advice. How long has a franchisor been in the business? The term "risk vs. loss" refers to the amount of return for funds invested. Which practice is a competitive concern for franchisees? Only franchisees operating multi-unit franchisees can own more than a single franchise.. Henry approaches her about operating his own business under the terms above. H0:1222Ha:12>22. c. Which of the following is true of the risk involved in buying an existing business facing bankruptcy? E. All of the above are about equal. Which characteristic is not considered a positive of franchising? a. Pewterschmidt Company values its inventory reported in the financial statements in terms Companies that invest in small businesses. d. a. Franchise fees: a. prepaid utility bills a. What is a realistic number for a sample size when doing market research? About fifteen percent of all marriages in North America fail. b. franchisee D. Usage tax. 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. What Should the Franchisor Control? - Franchise Law, Disputes C) Territory Which of the following ratios would be ranked the best? Business situations that are appropriate to consider when looking for growth through franchising include all but which one of the following? d. Who is responsible for these activities and outcomes? a. it may be purchased at a bargain price. The "right questions" the prospective small business owner should ask about a franchise deal with The franchisor provides a system for the franchisee to operate the business. B) Positive relationships with their franchisees 1- Reduced risk of failure. c. Good cause B. a. False T or F? a. c. B. The most common form of franchising today is one in whic. B. A. inventory 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. What factor generally determines which co-branding method is chosen by a franchisor? 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. 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. b. B. old-old. track record of the franchisor Test the following hypotheses at the .05.05.05 level of significance. & H_{\mathrm{a}}: \sigma_1^2>\sigma_2^2 Insurance McDonalds is the only franchise available for ownership internationally. d. The general purpose of a promotions package by the franchisor to potential franchisees is to: From a broad perspective, ( ) means effective communication and promotion of the franchised product or service to the targeted audience. Which of the following statements regarding the franchise fee are correct? b. In many instances, products or ingredients in a franchise must be purchased from ________. franchisette. d. 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. C. Is usually a one-time flat fee paid by franchisees to franchisors. Trade associations for the industry. A franchise is a business that markets a product or service developed by a franchisor, typically in the manner specified by the franchisor. Is the building heated with gas or electric? 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. new-new, old-old d. The accountant assigns revenues and expenses to specific years before preparing the financial statements. When buying a business, competition must be investigated because alternative energy d. the ability to build personal relationships with the owners and other employees. all of the above. If a franchise system is struggling, not achieving long-term success. There are four types of growth opportunities for franchise systems to increase sales and share-of-market within their customer base. payroll System to network with competing franchises. Business Brokers help entrepreneurs locate the funds necessary to start a business. Franchising and franchise channels continue to grow dramatically NOT: to generate data which can be used to accumulate working knowledge of dollars instead of units. E. None of the above. 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. a. D) Promotional support it can be either franchisor- or franchisee-driven. b. E. Franchisees provide significant operational assistance to franchisors. A. Firms selling heavy industrial machinery are most likely to use the franchise model to control product distribution. B) Be a concern for a franchisee new-new, new-old True or false: Individual thinking they were buying franchise that gave them an opportunity for success found that they had paid for what amounted to little more than a name. The potential value of any She heard about a business model in which an individual or organization grants a license to another to operate an individually owned business as though it were part of a chain of outlets or stores. How does Auntie Anne's ensure that new franchisees understand the company's operational approach? asset pricing. B. a. Equipment Intro to Business- Chapter 5 Flashcards | Quizlet plant Which of the following types of financial ratios measures the ability of the franchise organization to turn sales into profits? b. b. Leticia has always wanted to own her own restaurant but has read that restaurants have a very high failure rate. Small businesses have an advantage over large businesses in all of the following areas except, Jimmy and Henry are considering opening a smoke shop. a. C) Ensures ongoing support To properly develop a franchise system the franchisor must develop the franchise system at three different levels. Macy because the SBA's primary financial function is to guarantee loans. a. In this scenario, John is a _____. d. Which of the following statements regarding franchisors' long-term success are true? The reason franchises have been a popular form of business is due to ___________. A franchise is a legal agreement. 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. goodwill. Jeremy has written a business plan for the business he would like to open. c. f(t)=t2t+2. the franchisee's revenue stream is fairly consistent because franchisers pay fixed fees and Is it up to date? Add appropriate labels. Why might it be a good idea for a franchisor to investigate several ASP vendors before choosing one? They meet with a business planner who helps them compile a business plan. the franchise. 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. d. About how much time does it typically take in the United States to establish a business as a legal entity? a. There is an established set of process. b. Pay for all physical assets (e.g., equipment and building), needed to operate the franchise. Advertising 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.
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