_________ is a broad area that encompasses such things as brochures, signs, logos, televisions advertisements, newspaper, advertisements, sales techniques, adn internal business design. B. B. About how much work should she expect to do to make the franchisee successful? C. The franchisor provides little beyond a license to use its trademarked products. Which of the following are benefits of purchasing an existing business? There is a higher likelihood of success. WebProbably the earliest example of franchising in the United States is most likely to be: McCormick Harvesting Machine Company. There is one thing every franchise system knows. Which of the following is true about co-branding? What crucial element is necessary for the success of co-branding partners? In the "_________" section of the UFOC, the franchisor must disclose all fees that are charged to franchisees. Ch. 5 business Flashcards | Quizlet Equipment minority NOT: to generate data which can be used to accumulate working knowledge Small Business Chp IV - Franchises and Buyouts Flashcards track record of the franchisor Darrel is considering expanding the business by franchising. franchises have a very high success rate compared to other small businesses. c. True or false: A franchisor and a franchisee are both dependent on each other for success. What amount is generally considered adequate? new-old, old-old Ellis owns a Subway franchise. 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. According to Jim Peterson, it is important to know how customers honestly perceive the quality of the product or service offered by the franchise system. D. Number of channel members and degree of control. A regular and continuous fee paid to the franchisor by the franchisee is called: a. The franchisee and franchisor are linked by a bond of voluntary cooperation rather binding contracts. Repeat the test using the critical value approach. The franchisor might negotiate a complete different deal with the franchisee in order to get started with a self-sufficient operator. Maria has purchased a Subway franchise. Web4-family background. d. age of the competition's owners. unscrupulous practices. Regarding the interfaces between channel management and other marketing mix variables that exist in franchise channels, which statement is most accurate? A. time and effort are reduced C) Penalty Uniqueness in a product or service can be demonstrated through a new-new approach or a new-old approach. In the franchise system's "Bankruptcy" section of the UFOC, the company must disclose which of the following? d. a. c. services. E. Number of manufacturers in the industry. What is the largest guaranteed loan she could be granted? inventory turnover. This resulted in the passage of the Uniform Franchise Offering Circular (UFOC). b. d. In a franchise, two parties are involved, the franchisee and franchisor. d. E) Local publicity campaigns. Does a physical count correspond with the book count? Which of the following statements regarding the franchise fee are correct? d. Entitles the franchisee the right to open a business in a given area. a. asset value. c. Macy argues that its primary function is to guarantee loans. WebWhat is usually required for a franchisor to terminate a franchise? 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? equity? hurt not only the business at their location but also the image of other locations. 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. c. franchisor E. Single-unit franchises are a very low-cost method of selling. Chapter 1-4 Flashcards | Quizlet Identifying one or more target markets and creating a marketing mix that has focus upon a customer grouping's needs is the definition of. This is the most common form of franchise channel structure. B) Designated suppliers a. B) Eases the issues of start-up development must be provided to the potential franchisee early in the process. Upon paying the upfront fee and continuing royalties, the franchisor grants the franchisee the rights to use a. all of the above. b. Potential franchisees should examine the franchisor's package and balance the cost and the _________ being offered. 20% D. Usage tax. Which characteristic is not considered a positive of franchising? A major reason for success of franchising is C) Encouraged a. Which of the following things is NOT true about the accounting process? Which one of the following is not a major question at the onset? B) Research Which of the following are reasons entrepreneurs should conduct their own market research? The "Federal Trade Commission" does not provide information on franchise success. buying a new business Bus-x100 Exam #2 Flashcards | Quizlet Which of the following is an advantage to the franchisee? WebThe way to approach a new business venture is to think up a good or service that is unique. the franchisee Changes in leasehold conditions. Opening a franchise business has a great deal in common with _________. b. Hobby the exact status of the franchisor's intellectual property, such as logos, symbols, and words. franchisor. d. A) The franchisor What is the owner's personal net worth? The _________ is the entrepreneur who buys the franchise from the ________. What is the primary purpose of information systems in a start-up franchise? Increased management flexibility b. franchising What environmental impact did European practices of land management have in Australia and New Zealand? 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. Changes in zoning which affect the business. The ___________ is a contract linking all franchisees to the franchisor. The potential buyer Which is not a key question to ask when buying a business? B. b. D) The community Why would a franchise system monitor its external environment? Business Brokers help entrepreneurs locate the funds necessary to start a business. d. WebA franchise agreement granting the right to use a widely recognized product or trademark. It is a channel used exclusively for distribution of consumer durable goods. b. NOT: asset utilization for the business D) Both A and B training and guidance. a waiver of competition clause. E) All of the above, Products and services in a franchise may not be altered, added, or dropped without ________. b. 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. A. To properly develop a franchise system the franchisor must develop the franchise system at three different levels. franchisor supplies brand names, techniques, or other services instead of a complete product. The Consumer Product Safety Act of 1972 sets safety standards for products other than food and drugs. The majority of small businesses are managed by, Hamilton has wanted to start a business of his own since he was a small child. a. This demonstrates which advantage of a small business? franchatter. D) All of the above are types of franchising. b. symbols and logos. Some franchisors provide different levels of support depending on how much the franchisee is willing to pay. Which of the following is true regarding inspections conducted by franchisors? The "________" section of the Uniform Franchise Offering Circular (UFOC) details the ancillary services that are offered by a franchisor. Intro to Business- Chapter 5 Flashcards | Quizlet 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. franchise fees What is the primary disadvantage of owning a franchise experienced by a franchisee? Which of the following issues should detailed in the "Business Experience" section of the Uniform Franchise Offering Circular (UFOC)? None of the above, Who must negotiate the final deal? franchisee. all of the above. Regulations that protect consumers include trademarks, zoning, regulations, and consumer protection laws. a. Traits that entrepreneurs tend to have include all but which one of the following? D) Initial inventory b. Sarah has opened her own cosmetology business in a small shopping center with a lot of foot traffic. An understanding of customers buying patterns before the business begins operations. Which of the following small businesses could be categorized as being in the distribution industry? A. the ability to build personal relationships with the owners and other employees. 41 True or false: An entrepreneur should explore what aspects of a franchisor-franchisee contract are negotiable by making a list of wants and desires. b. NOT: to improve operations at franchised units. How much of successful selling consists in simply listening to the prospective buyer? franchisor. E) Employees, A franchisor's record of success can ________. All of the following are disadvantages of franchising for the franchisee, except for: typically operate as a non-unionize business establishment. c. All of the above. The individual who arranges for a dealer to handle a specific product or service under certain mututally agreed upon conditions is known as the _____. Which of the following activities at the franchised unit should be the center of attention? B. E) All of the above, The formula provided by the franchise does which of the following? A. E) Regret, Performing due diligence may include ________. And, how much will it cost to implement? poll tax that required each person to pay a flat B. Which one of the following is NOT an advantage of franchising for the franchisee? a, b, and c only. In the United States, ___ account(s) for 97.5 percent of all identified exporters and produce(s) 31 percent of export value. a. is the principal governing mechanism of the franchisor-franchisee relationship. green products The individual who buys the franchise is the Are You Still a Franchisee When the Franchisor Controls Everything? c. Though a location manual or policy may be developed to assist in determining optimal sites, for franchised businesses that require a store-front location the final determination often rests with: Which two concepts receive primary consideration when determining store layout? the franchisee's revenue stream is fairly consistent because franchisers pay fixed fees and have the ability to quickly adapt to change. your accountant. Spend a significant amount of time being visible. D. There is no difference, they are different labels for the same form of franchise channel. d. the franchisor offering a standard,well-known product or service. He wants the business to succeed. 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 Changes in the product supply chain. d. E. None of the above. Which of the following types of financial ratios measures the ability of the franchise organization to turn sales into profits? Where is Ellis most likely to go for advice and guidance about running the outlet? C) Fixtures An existing business has an established cash flow. All of the following are a new type of franchising opportunity except ________. 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. The elimination of time and effort associated with starting a company is an advantage of acquiring an ongoing venture. new-new, new-old A) They may be announced or unannounced. new-old, Which of the following are trends creating business opportunities? 2. c. b. Which of the following helps to simplify the difficult site selection process? All are costs. A) Type of franchise Dwight has a small business and would like to sell his products overseas. Jack owns a franchise. 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. opening product inventory. C) Operations Portica knows the customers of her hat shop by name and knows each of their preferences. Operational Control. TRY: data analyses. prepaid expenses Sales tax. The Small Business Administration offers many courses to individuals interested in going into business or improving his or her business. A) In traditional stand-alone units Which of the following statements most accurately describes the success rate of franchises? a. amount to the government independent of his or her He has read about the success rates of franchises and the success rates of start-up businesses. management and training. 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. c. The franchise with the most outlets in the United States is. provide continuing aid and a guidance to the person buying the franchise. Communications between franchisors and franchisees is one-way, performance data that flows from the franchisee to the franchisor. franchiser A well-established business model WebFrianchisees are likely to be more successful when the franchisor provides high-quality products and helps with finding locations. journal, general ledger, financial statements. Franchisors must have a high-quality support market value. b. Which of the following are resources that an entrepreneur can typically use to find a business for sale? When will the activities be started and completed? Is the building heated with gas or electric? B) Failure a. Pewterschmidt Company values its inventory reported in the financial statements in terms This includes all of the following except: A) Training The extra value a business can command in a sale is known as Godfrey has just graduated from business school and is seeking employment. The _____approach indicates the importance of people's awareness of their daily lives for developing new business ideas. Sylvia has an SBA-guaranteed business loan for the average life of such loans. The International Franchise Association is ________. Many fees are must be paid regardless of ________. How many of the employees will remain? The franchisor provides a system for the franchisee to operate the business. d. A ________ specializes in selling buinesses. An ongoing entity often has a higher purchase price due to __________. new-new How many of the personnel will remain with the firm? c. B) Business-format franchising old-old E) Type of product. C) Popularity When Reno purchases the McDonald's she will be expected to supply, labor and capital and will own and operate the outlet. You stop by a Carl's Jr. fast food restaurant and notice that they also have Green Burrito Mexican food. Debt Service The franchisor licenses its trademarked products to franchisees. Suggests the franchisor provides relatively little in the way of management assistance to the franchisees. Which of the following is an advantage to purchasing a franchise?. planning, persistence, patience, people, profit (pg 136) what are the 3 Which type of franchisor program offered to franchisees is based on the general notion that new franchisees have little or no specific business knowledge about the franchise system? Which of the following should the potential entrepreneur consider in developing a plan of operation? T/F, A disadvantage of purchasing a franchise is that franchisors seldom provide adequate training programs. A trial period of at least 3 years C. Court permission D. Notice to the Service providers that wish to maintain a high degree of control over channel members are likely to use the franchise channel model. A) Guarantees brand recognition NOT: anticipated costs of operation. My salary has remained the same for the past 7 years, but my standard of living has fallen. d. it may be purchased at a bargain price. In business format franchises the franchisor provides the complete system for operating the business. What is the first step to good site selection? d. a. What is the condition of the inventory? T/F, One drawback of becoming a franchisor relates to possible new restrictions as a requirement for contract renewal. Generally, franchise marketing channels are more closely knit (i.e., closer relationships) than conventional channels. WebWhich of the following is an advantage to purchasing a franchise?. The "_______" section of the UFOC contains how disagreements will be resolved. new competition may reduce market share. Ability to achieve a good golf score while making sales to prospective franchisees. 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. a. accounts receivable Not coincidentally, these issues have become more prevalent and evident with the advent of 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. Payroll tax. Pay for all physical assets (e.g., equipment and building), needed to operate the franchise. According to the text, which of the following is not a consideration when selecting a franchise? An individual looking to buy a franchise should _________. A franchise system can be used for handling guidance from the franchisor Terry's Tires made just under $750,000 last year, according to the Small McDonalds is the only franchise available for ownership internationally. Which one of the following statements is true? Chance 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." C. The greatest benefit to franchisors is the marketing assistance they receive from franchisees. C. Franchise agreement Which of the following is something that would not be included in the plan? B. Small businesses have an advantage over large businesses in all of the following areas except, Jimmy and Henry are considering opening a smoke shop. control exercised by the franchisor 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? Which of the following is an intangible asset? Which of the following businesses would most likely be included in the production industry? a. D. They are most common among automobile and soft drink channels. Often, strategic initiatives fail because: They are seen as extra work to be accomplished in addition to existing work. The person who gets the franchise is usually required to do all of the following except: When purchasing an existing business, the prospective owner should conduct an assessment of the current group of employees. What special skills does the entrepreneur have that will bring success? 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. Which one of the following tasks is not one of these six major organizational development tasks? What changes will be made? Which of the following processes involves interpreting a relationship between two financial figures? plant c. E) None of the above, All of the following are factors of franchise cost except ________. E) None of the above, Franchisors are focused on creating wealth for ________. Why might co-branding be beneficial for a mature market? c. Which of the following is NOT a component of a properly developed franchisor plan? Brenda has a small grocery store in a residential neighborhood where she primarily sells staples to the people who live in the area. B) Calling on existing franchisees 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. About how much time does it typically take in the United States to establish a business as a legal entity? b. T/F, One benefit of becoming a franchisee is sharing a profits with the franchisor. C) Visiting the franchise headquarters The franchisor owns the trademark and business model. Negotiating a deal to acquire exactly what is required from the operation. Hobby 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 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. The control issues are: 1. & H_0: \sigma_1^2 \leq \sigma_2^2 \\ d. The Franchise Disclosure Document helps the franchise buyer to make a knowledgeable purchase. 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. Why might it be a good idea for a franchisor to investigate several ASP vendors before choosing one? Firms selling heavy industrial machinery are most likely to use the franchise model to control product distribution. Which of the following statements regarding what franchisors include as part of their package are correct? Identify which generic category fits most franchise systems below. d. new-old a. What types of customers does this store attract? Which of the following laws requires lenders to inform consumers about all costs of credit before an agreement is signed? b. a. collaboration with suppliers through Internet, NOT: franchisors B. a. legal and professional fees A) Recognition reduced concern over future operations. c. True or false: A disadvantage of buying an existing business is that operating processes and policies have already been established. one time franchise fee and monthly royalties based on sales. The franchise's time frame. 3 reasons for buying an existing business. procedures are essentially "set in stone.". new-old, old-new, Starting a business by adapting something already on the market is called what approach? Several years ago the British government imposed a goodwill. C) Never provide help for start-up All of the above. he/she is very straightforward about his/her interest, availability, and financial resources. d. Which of the following are areas that the potential franchisee may be able to negotiate with the franchisor? the franchisor. Which of the following is a true statement pertaining to single-unit franchises? T/F, A franchise is typically attractive because it offers training, financial assistance, and operating benefits. Which of the following could he use to protect his interests?. E) An act of God, In relation to franchising advantages, you purchase the use of the company's logo, trademark, and advertising, as well as the physical design, layout, and dcor that ensure ________. quality of the competition. Which technique is not valid for valuing a company? 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. Which of the following statement most accurately describes a franchise channel? c. none of the above. Marketing strategy. Leticia would like to start a business and has investigated starting her own or buying a franchise. There is no need for legal representation when entering into a franchise agreement. Solved All of the following are reasons a franchisor may - Chegg Fran's Fancy Frocks, a retail clothing store, may not exceed ___ in annual sales to qualify as a small business. Evaluating franchise opportunities include finding out more about which of the following? 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? Richard has a motorcycle and ATV store. b. a. all of the above. Reviewing personnel of the business about to be purchased is important in order to determine E) Not be counted on, A) Provide a significant advantage for your business start-up, All of the following are advantages of franchising except ________. c. Considering the processes of management for a the franchise system, overall planning of the firm for today's operations and the future of the system itself is the primary responsibility of, NOT: franchisees a. It is structured between single-unit and multi-unit franchises. a. The product quality is within the perception of the customer and is greatly influenced by the franchise system's server. Which of the following best describes the industry she operates in? He states in the plan, "This business will serve over 400 customers by the end of the year and employ ten full-time employees." 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. the franchise A. d. Solved Knowledge Check 01 Which of the following statement There is an established set of process. 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. How does Auntie Anne's ensure that new franchisees understand the company's operational approach? Develop strategic plans for the franchise firm. A) Provide a significant advantage for your business start-up Franchises are governed by ________ laws and regulations. c. A franchisee generally receives which of the following when purchasing a business? b. 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. The franchisor's responsibilities include providing Which of the following is not an advantage of a franchise? C) Years of experience D) Removes the creativity and freedom This is higher than _____, the amount the Census Bureau and Federal Reserve say 50 percent of all new businesses begin with.. A(n) ____ is a carefully constructed plan for an individual starting a business. Richard orders some Harley-Davidson Trikes for his inventory. The implementation of marketing mix variables in franchise channels is less fluid and flexible than in conventional channels. determines the salaries of the corporation's officers. 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. What is the primary purpose of information systems in a mid-size franchise? franchisee all of the above. C. In a franchise, parties are independent. Foundations of Business: Chapter 5 Flashcards | Quizlet C) Territory Insurance Name the three steps used to allocate producing department activity cost pools using the ABC approach. The number of jobs provided by franchised businesses is slightly less than those provided by durable goods manufacturing. B. risk versus reward. c. Which is not a start-up expense?
a franchisor can control all of the following except