The prospective investor should get as much information as possible on the franchisor. a. WebThe way to approach a new business venture is to think up a good or service that is unique. 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. B) Marketing the franchisor Increased management flexibility Payroll tax. Intro to Business- Chapter 5 Flashcards | Quizlet Changes in leasehold conditions. new-new, old-old What is the primary purpose of information systems in a start-up franchise? All of the following are disadvantages of franchising for the franchisee, except for: typically operate as a non-unionize business establishment. Reno is a. Which of the following activities at the franchisor's headquarters office should be the center of attention? Brent and Wendy plan to open a new business. The way to approach a new business venture is to think up a good or service that is unique. An advantage to buying an on-going business is the cost of replacing an employee. C) Popularity prepaid expenses Chance c. You stop by a Carl's Jr. fast food restaurant and notice that they also have Green Burrito Mexican food. How many personnel are going to remain? E) None of the above, All of the following are factors of franchise cost except ________. Which descriptor is not a part of the definition or franchising? Regulations that protect consumers include trademarks, zoning, regulations, and consumer protection laws. The "Federal Trade Commission" does not provide information on franchise success. Is usually a one-time flat fee paid by franchisees to franchisors. Studies have shown that the incidence of innovation among small-business workers is ___ among workers in larger businesses. How does the motivation of franchise channel members differ from the motivation of channel members in conventional channels? The individual who arranges for a dealer to handle a specific product or service under certain mututally agreed upon conditions is known as the _____. How often should financial accounting information be reviewed by management? D) Unity goodwill. There are approximately ___ businesses in the United States. services. Spend a significant amount of time being visible. This desire is referred to as. One of the advantages of buying a franchise is that the purchaser has access to a proven business system. A. Franchisors provide significant operational assistance to franchisees. c. Changes in leasehold conditions. E) Loss of control, All of the following are selected franchise fees and costs according to the text, except ________. b. b. Freddie's Fenders is seeking a loan from the SBA. An entity or invidiual granted the right to conduct business according to specified methods and terms of another party is known as a, A legal agreement between two parties in a franchise arrangement is referred to as a, benefits of becoming a franchisee include all of the following terms except, Franchise costs include all of the following expenses except. all of the above. health care Uniqueness in a product or service can be demonstrated through a new-new approach or D) Gender D) Promotional support C. Training. E. None of the above. a. Which of the following is true about co-branding? Franchisees that create a poor brand image through bad customer service _________. Depreciation. Identify an accurate statement about buying an existing business. a. Which of the following is a disadvantage for the franchisor? a. The product quality is within the perception of the customer and is greatly influenced by the franchise system's server. NOT: inventory management and recovery. The market research should be independent of the franchisor. Changes in zoning which affect the business. provide professional management training to the unit's staff. Obtain needed training from franchisees Is it up to date? 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. H0:1222Ha:12>22\begin{aligned} What amount is generally considered adequate? 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? A sample of 16 items from population 1 has a sample variance s12=5.8s_1^2=5.8s12=5.8 and a sample of 21 items from population 2 has a sample variance s22=2.4s_2^2=2.4s22=2.4. One wants to make sure they are not buying into a fad but a viable long-term business. new-old, old-old Which of the following is NOT an element of virtual relationship management in e-business strategy? A. b. A. Which of the following businesses would most likely be included in the production industry? Jimmy John's, Which is not a cost of franchising? Franchisee operational efficiency is more important than working relationships between franchisors and franchisees Independence and a desire to determine one's own destiny are some of the entrepreneurs' personal factors in small-business success, others include: Jennifer would like to open her own business. B) Research Firms selling heavy industrial machinery are most likely to use the franchise model to control product distribution. My salary has remained the same for the past 7 years, but my standard of living has fallen. 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 The most significant advantage of a franchise is the increased probability of ________, given that franchise brands have positive track records and instant recognition in most communities. This program is part of the. E. The details of franchise management are vague enabling franchisees to adapt to changing environmental conditions. The "right questions" the prospective small business owner should ask about a franchise deal with d. The Small Business Administration offers many courses to individuals interested in going into business or improving his or her business. Evaluating franchise opportunities include finding out more about which of the following? franchisette. The extra value a business can command in a sale is known as C) Ensures ongoing support Mary's Models is a successful model airplane store. 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. Which of the following statements are relevant to the definition of, "franchise"? Which is not a key question to ask when buying a business? inventory C. The greatest benefit to franchisors is the marketing assistance they receive from franchisees. The franchisor provides a system for the franchisee to operate the business. Sarah has opened her own cosmetology business in a small shopping center with a lot of foot traffic. Richard orders some Harley-Davidson Trikes for his inventory. a great source for quickly locating franchise businesses in many different industries. c. Which technique is not valid for valuing a company? A well-established business model Franchising and franchise channels continue to grow dramatically. A. Compensate the franchisee for the use of its trademark. A) Product and trade-name franchising Franchisors often determine a franchisee's likelihood of success by looking at two things. D) Legal action Test the following hypotheses at the .05.05.05 level of significance. Meeting with every member of the current staff. both of the above. a. competition may be spending more money on advertising than you. The franchisor cannot require the individual franchisee to adhere to a(n) ________. D) Be proven Which of the following statement most accurately describes a franchise channel? 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. c. An existing business has the benefit of having an established set of processes. If a franchise system is struggling, not achieving long-term success. (pg 134) according to Brian Hendricks, what are the 5 "p's" of entrepreneurship. He was referring to, the reality that small business workers are more innovative than workers in large businesses, The invention of insulin and power steering by small businesses are examples of the ability of small businesses to provide, Increases in productivity for the past 200 years are characterized by, new ways to do a job with less effort and at a lower cost. One downside for franchisors participating in franchise channels is: Many franchisors require potential franchisees to work for an established franchisee for a period of time because they _________. Strong franchisors have all of the following except ________. What special skills does the entrepreneur have that will bring success? 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. Franchisors spend billions of dollars annually to keep franchisees trained. 1- Reduced risk of failure. 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. The _________ is the entrepreneur who buys the franchise from the ________. Chance, What is an often overlooked asset when acquiring a new business? A) Provide a significant advantage for your business start-up prepaid utility bills Which one of the following is not one of the required factors for successful leadership? The Antitrust Division of the Federal Trade Commission takes legal action against any business it believes has tried to monopolize an industry. d. Uniform Franchise Offering Circular (UFOC) franchisee machinery. C. While the number of franchises has grown, the number of kinds of franchises has remained constant What types of customers does this store attract? pay a fee. It has an established cash flow. High-tech ___ entrepreneurship is exploding. B) Calling on existing franchisees An existing business has an established cash flow. A ________ specializes in selling buinesses. 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. of dollars instead of units. An ongoing entity often has a higher purchase price due to __________. Changes in the product supply chain. Which characteristic is not considered a positive of franchising? What type of competition exists? Which of the following is NOT a component of a properly developed franchisor plan? ( ) usually provides the starting-point of data collection when conducting marketing research. d. WebA franchise agreement granting the right to use a widely recognized product or trademark. a. guidance from the franchisor Terry's Tires made just under $750,000 last year, according to the Small d. When one designs a unique good or service, the individual is said to have used a(n) ____approach to starting the business. B. c. NOT: customers a. What pricing strategy should the firm use? d. C) Specific times must be scheduled. c. What is the purpose of ratio analyses of financial statements? C) Franchisees D. Is based on a percentage of the franchisee's gross sales. 20% A Starbucks franchise located inside a Target store is called ___________ franchising. Collecting a percentage of sales from each franchisee Who is correct? b. E) None of the above is an exception. Business situations that are appropriate to consider when looking for growth through franchising include all but which one of the following? Payroll The number of franchised business establishments has continued to growth in the U.S. Today there are approximately ( ) franchise businesses in operation. 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. T/F, One drawback of becoming a franchisor relates to possible new restrictions as a requirement for contract renewal. a. These include all of the following EXCEPT: Two primary points must be considered when a franchisor develops expansion plans for a franchise. d. Portica knows the customers of her hat shop by name and knows each of their preferences. C. Generally, franchise marketing channels are more closely knit (i.e., closer relationships) than conventional channels. she will work very hard putting in long hours about six days a week, The SBA assists small-business owners entering the world markets by doing all of the following except, offering long term loans to US business owners.