BA109 Quiz 6 UPDATED Exam Questions
and CORRECT Answers
A significant advantage a franchisee has over an independent business is the participation in
the franchisor's ________ largely due to the ________ the franchise offers. - Correct Answer-
centralized buying power: economies of scale
A franchise is a system of distribution in which semi-independent business owners pay
________ and ________ to a parent company in return for the right to become identified with
its trademark, to sell its product or services, and often to use its business format and system. -
Correct Answer- fees; royalties
When the franchiser has the right to establish a semi-independent organization in a particular
territory to recruit, sell, and support other franchises, it is known as a ________ franchise. -
Correct Answer- master
The bigger the franchise, the more successful the franchisees will be. - Correct Answer- False
The franchisee turnover rate is the rate at which franchisees leave a franchise system. -
Correct Answer- True
Quality is so important in franchising that most franchisers retain the right to terminate the
franchise contract and to repurchase the outlet if a franchisee fails to maintain quality
standards. - Correct Answer- True
The failure rate for franchises is: - Correct Answer- lower than the average rate for new
businesses.
Benefits of involvement in a franchise experience include: - Correct Answer- All of these
Franchises have experienced three major growth waves since its beginning that include a
focus on: - Correct Answer- rapid growth, the service sector, and specific market niches.
A recent study reports that the success rate of franchisees increases when a franchise system:
- Correct Answer- All of these increase the rate of success.
and CORRECT Answers
A significant advantage a franchisee has over an independent business is the participation in
the franchisor's ________ largely due to the ________ the franchise offers. - Correct Answer-
centralized buying power: economies of scale
A franchise is a system of distribution in which semi-independent business owners pay
________ and ________ to a parent company in return for the right to become identified with
its trademark, to sell its product or services, and often to use its business format and system. -
Correct Answer- fees; royalties
When the franchiser has the right to establish a semi-independent organization in a particular
territory to recruit, sell, and support other franchises, it is known as a ________ franchise. -
Correct Answer- master
The bigger the franchise, the more successful the franchisees will be. - Correct Answer- False
The franchisee turnover rate is the rate at which franchisees leave a franchise system. -
Correct Answer- True
Quality is so important in franchising that most franchisers retain the right to terminate the
franchise contract and to repurchase the outlet if a franchisee fails to maintain quality
standards. - Correct Answer- True
The failure rate for franchises is: - Correct Answer- lower than the average rate for new
businesses.
Benefits of involvement in a franchise experience include: - Correct Answer- All of these
Franchises have experienced three major growth waves since its beginning that include a
focus on: - Correct Answer- rapid growth, the service sector, and specific market niches.
A recent study reports that the success rate of franchisees increases when a franchise system:
- Correct Answer- All of these increase the rate of success.
