\end{aligned} a. c. a. 20% hurt not only the business at their location but also the image of other locations. Payroll Franchisors often determine a franchisee's likelihood of success by looking at two things. f(t)=t2t+2. C) Years of experience b. The franchisee and franchisor are linked by a bond of voluntary cooperation rather binding contracts. As it pertains to the scope and importance of franchising, which of the following statements is most accurate? When one designs a unique good or service, the individual is said to have used a(n) ____approach to starting the business. Marilyn argues that the SBA's primary function is to lend money. The motivation of franchise channel members has less to do with cooperation and partnerships than in conventional channels. What is the first step to good site selection? The most significant advantage for a franchisee is the increased probability of success. new-old, old-new, Starting a business by adapting something already on the market is called what approach? Which characteristic is not considered a positive of franchising? D) Data regarding existing units C) Any suppliers 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. "When sales continue to grow but are increasing at a decreasing rate" is associated with which stage of the product life cycle? D. Reduce uncertainty A franchise system can be used for handling What is the name of that program? A franchise is a legal agreement. Consideration occurs when one party in a contract offers or agrees to do something and the other party accepts. 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. b. Franchising and franchise channels continue to grow dramatically 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. One of the main reasons she may have made the move was. C) Penalty it is possible to start a business with limited capital. d. a. Which of the following is NOT one of the four P's of selling? Identify which generic category fits most franchise systems below. a. When will the activities be started and completed? After all of your investigation into a franchise, the final decision should be up to D) The community In the franchise system's "Bankruptcy" section of the UFOC, the company must disclose which of the following? d. c. c. How does the motivation of franchise channel members differ from the motivation of channel members in conventional channels? poll tax that required each person to pay a flat Business services. b. b. a. In franchising, the _____ is the firm that originates the idea for a business and develops the operational methods. C) Specific times must be scheduled. a. D) Doing Internet research 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. Traits that entrepreneurs tend to have include all but which one of the following? market value. Which descriptive statement is NOT one of the legal ways of protecting a trademark? A) Guarantees brand recognition b. The International Franchise Association is ________. The person who gets the franchise is usually required to do all of the following except: What is the effect on economic Start-up standards required of franchisees may include which of the following? b. c. C. Nature of product and number of channel members liquidation pricing, "Piggybacking" one's way into business involves using a ____approach. track record of the franchisor Find all vertical and horizontal asymptotes of the graph of the given function. the franchisee's revenue stream is fairly consistent because franchisers pay fixed fees and Which of the following are areas that the potential franchisee may be able to negotiate with the franchisor? sales taxes, business taxes, property taxes, employee taxes. The local Small Business Administration Office Degree of control and importance of channel members. The advantages of franchising include: c. Matilda would like to open an ice cream and sweet treats store but she will need a loan to do so. a. E) None of the above is a type of franchising. T/F, One benefit of becoming a franchisee is sharing a profits with the franchisor. C) Franchisees It is uncommon for a franchisor to handle the national and regional media purchasing for a franchisee. The franchisor licenses its trademarked products to franchisees. a. Entitle the franchisee to use the franchise's name. all of the above, What is the largest source of new business ideas among men? The term "upside gain and downside loss" refers to the profits the business can make and the losses it can suffer. design a logo for the unit. c. What is the condition of the inventory? A) Training 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. control exercised by the franchisor a. b. 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. a. E) All of the above, Products and services in a franchise may not be altered, added, or dropped without ________. insurance Sales tax. Why do most franchisees choose to go into business with a franchised company? B) In convenience stores one time franchise fee and monthly royalties based on sales. c. The accounting records of a company are kept separate from its owners. The potential value of any 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. opportunitites. proven track record. T/F, Valuing a company is an easy task that results in a precise figure T/F, Financial statements can mislead a potential purchaser trying to develop an accurate business valuation T/F, A nondisclosure agreement signed by a prospective buyer shows the seller that the buyer intends to purchase the business T/F. Which one of the options below is not one of these critical customer perception factors? legal and professional fees a. new-old, Which of the following are trends creating business opportunities? In the "_________" section of the UFOC, the franchisor must disclose all fees that are charged to franchisees. What type of competition exists? Which is not a start-up expense? d. Which is the most important and why? This resulted in the passage of the Uniform Franchise Offering Circular (UFOC). Milkshake Lending Company is a small privately owned firm providing venture capital to small businesses. 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 B) Positive relationships with their franchisees (Check all that apply.) 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. Uniform Code of Justice (UCJ) This is a ___ business. Not coincidentally, these issues have become more prevalent and evident with the advent of The "Federal Trade Commission" does not provide information on franchise success. to identify factors which may pose major threats to or provide significant opportunities for the franchise system. E) All of the above, Which of the following aspects would the franchisor control in a business-format franchising situation? c. An ongoing entity often has a higher purchase price due to __________. c. Debt Service Name the three steps used to allocate producing department activity cost pools using the ABC approach. A franchise is a business that markets a product or service developed by a franchisor, typically in the manner specified by the franchisor. If a franchise system is struggling, not achieving long-term success. Studies have shown that the incidence of innovation among small-business workers is ___ among workers in larger businesses. c. d. 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. b. d. True or false: An entrepreneur should explore what aspects of a franchisor-franchisee contract are negotiable by making a list of wants and desires. A. Upon paying the upfront fee and continuing royalties, the franchisor grants the franchisee the rights to use Regulations that protect consumers include trademarks, zoning, regulations, and consumer protection laws. E. The desired degree of control of franchisees by franchisors is not relevant to the decision by franchisors to use the franchise channel model. a. They have heard that the disadvantages of small businesses include all of the following except. Uniqueness in a product or service can be demonstrated through a new-new approach or a new-old approach. The 2014 Annual Report for Murphy Oil Corporation (see www.murphyoilcorp.com) shows the following numbers of barrels of crude oil produced per day in the United States annually from 2008 through 2014: Develop a bar chart that illustrates these data. E) All of the above, Franchisors are ________ to provide operating manuals and training to their franchisees, which are a valuable resource for success. new-new, new-old Communications between franchisors and franchisees is one-way, performance data that flows from the franchisee to the franchisor. All franchisees operating under single-unit franchises own and operate one unit. inventory C. Multi-unit franchises require the franchisor to provide greater operational assistance to their franchisees than do they do for single-unit franchises. c. Godfrey has just graduated from business school and is seeking employment. C. Potential to reduce distribution costs your financial backer. 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. 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. D) Unable A. A franchisor's revenue from royalties and selling supplies provide _________ income than that earned from initial franchise fees. Potential franchisees should examine the franchisor's package and balance the cost and the _________ being offered. Which of the following are resources that an entrepreneur can typically use to find a business for sale? Which of the following statements regarding franchisors' long-term success are true? A) In traditional stand-alone units A partnership agreement identifies the type and value of the investment contributed by each partner. b. D. Franchisors spend billions of dollars annually to keep franchisees trained. Only franchisees operating multi-unit franchisees can own more than a single franchise.. One of the more interesting ratios for franchising is the Location Selection Ratio or Sales/Costs ratio. d. Which of the following does Smoothie King founder Stephen Kuhnau credit as the reason for his success? 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? Subway 9 Which major question in his business plan does this statement address? What amount is generally considered adequate? Which of the following is not a type of franchising according to the text? b. A. Identify an accurate statement about buying an existing business. location of the competition. it may be purchased at a bargain price. There is a higher likelihood of success. 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. to generate data which can be used to accumulate working knowledge. a trade restriction clause. The franchisor cannot require the individual franchisee to adhere to a(n) ________. Much franchise litigation has arisen over termination of owners. Which of the following types of financial ratios measures the ability of the franchise organization to turn sales into profits? Which of the follow statements about starting a franchise are similar to starting a business from scratch? WebAll of the following are a new type of franchising opportunity except ________. 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. According to the SBA, in 2012 women were 51 percent of the U.S. population, and owned at least ___ percent of all small businesses. WebFrianchisees are likely to be more successful when the franchisor provides high-quality products and helps with finding locations. 2. B) Be a concern for a franchisee 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. High-tech ___ entrepreneurship is exploding. Business format franchises are prevalent in which of the following businesses? There is no need for legal representation when entering into a franchise agreement. insurance Samantha would like to get a small business loan from the SBA. Business students at universities can work together to provide management counseling to small businesses in their community. About fifteen percent of all marriages in North America fail. C. Franchise fee. A) Success B) Research 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? Several years ago the British government imposed a 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. Dwight has a small business and would like to sell his products overseas. Potential franchisees should evaluate franchisors' operations based __________. d. T/F, A franchise is typically attractive because it offers training, financial assistance, and operating benefits. b. planning, persistence, patience, people, profit (pg 136) what are the 3 Which of the following is not a disadvantage of a major franchise? A CPA c. The most important area to examine prior to purchasing a business is company profitability. A) Accounting B) Business-format franchising a. management and training. franchisette. Which of the following is true about the serious prospective franchisee? A(n) _______ _______ is a basic contract generated by a franchisor for all franchisees. Because of disputes between franchisors and franchisees, a program was instituted to arbitrate them. This is the most common form of franchise channel structure. all of the above. 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. Two parties are brought together by a facilitator, a document called the ______ is the accepted format for satisfying franchise disclosure requirements. A trial period of at least 3 years C. Court permission D. Notice to the Increased management flexibility 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. Which one of the following statements is true? determines the salaries of the corporation's officers. The franchise distribution system is composed of approximately _________ franchise business establishments that provide more than 11 million jobs. 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 ability to build personal relationships with the owners and other employees. Prior job Regarding the interfaces between channel management and other marketing mix variables that exist in franchise channels, which statement is most accurate? 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. System to network with competing franchises. 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. b. all of the above. a. B. D) Gender A) Provide a significant advantage for your business start-up d. All can be sidestepped. There is one thing every franchise system knows. The "right questions" the prospective small business owner should ask about a franchise deal with d. D. System to network with competing franchises. The Uniform Franchise Offering Circular _______. Which of the following processes involves interpreting a relationship between two financial figures? d. explanation: Franchisees often report the following advantages: management training and support; brand-name appeal; standardized quality of goods and services; national advertising programs; financial assistance; proven products and business formats; centralized buying power; site selection and territorial protection; a greater chance for success. goodwill Which of the following activities at the franchisor's headquarters office should be the center of attention? Business related reasons for selling may include all but which of the following? D. Franchising is an American business model that does not work well outside the U.S. new-new, old-old The action plan covers 3 primary areas: the owner, the finances, and other vital factors. a. a. The number of franchised business establishments has continued to growth in the U.S. Today there are approximately ( ) franchise businesses in operation. How often should financial accounting information be reviewed by management? Which of the following is a question which can be sidestepped when buying a business? d. It is structured between single-unit and multi-unit franchises. The implementation of marketing mix variables in franchise channels is less fluid and flexible than in conventional channels. Sales records are of very little value to a buyer in evaluating a company's worth. d. Which of the following is a disadvantage for the franchisor? This is an example o. Craig has $60,000 to invest in a new small business. E. Number of manufacturers in the industry. Changes in leasehold conditions. Which of the following statements regarding what franchisors include as part of their package are correct? Franchising offers all the following benefits for franchisers except. What is the primary purpose of information systems in a start-up franchise? The franchisee is bound by the terms the franchise contract. Selling a franchise to the franchisee Which of the following is like a "snapshot" of the franchise's fiscal condition? a. all of these are reasons it could be beneficial. A) Product and trade-name franchising The inventory should be examined for which of the following? B) Consistency Which of the following sequences indicates the path taken by these figures during the accounting process? Darrel's Donuts has been operating quite successfully for two years. C) Operations b. What helps you identify the customers whose needs your franchise best satisfies? minority d. And, how much will it cost to implement? economic efficiency? d. E) Not be counted on, A) Provide a significant advantage for your business start-up, All of the following are advantages of franchising except ________. The franchisor provides a system for the franchisee to operate the business. B) Marketing E. None of the above. Which of the following organizations can assist him? b. franchisor supplies brand names, techniques, or other services instead of a complete product. D. Single-unit franchises enjoy a favorable image among consumers. My salary has remained the same for the past 7 years, but my standard of living has fallen. Why might it be a good idea for a franchisor to investigate several ASP vendors before choosing one? Solved Knowledge Check 01 Which of the following statement The difference between single-unit and multi-unit franchises is: d. The "Trademarks" section of the UFOC details ___________. Chance, What is an often overlooked asset when acquiring a new business? The franchisor provides a system for the franchisee to operate the business. The Antitrust Division of the Federal Trade Commission takes legal action against any business it believes has tried to monopolize an industry. A. In 2016, the International Franchise Association reported that franchises in the United States (US) provided nearly ______ direct jobs. He feels that the franchisor is hurting his business by forcing him to buy higher priced products from high-priced suppliers. Education courses Which of the following is true about co-branding? The most common form of franchising today is one in whic. the health problems he faced as a teenager. 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.

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