Franchising Exam 1 2023/2024 (Solved)

A ______ is a legal agreement that allows an individual to market and sell a company's products within a certain area. - ANSWER-Franchise _______ is the person who purchases a franchise and a ______ is the person or company who offers a franchise. - ANSWER-Franchisee, Franchisor _______ are fess that franchisors receive in exchange for a service and/or a product. - ANSWER-Marketing fees Between Product-and trade-name & Business-format franchising, product-and-trade-name is a more common. - ANSWER-False Which of the following is not a component of a franchise opportunity? - ANSWER-The use of a product followed by a marketing plan Texaco gas station is a type of Product-and trade-name franchise. - ANSWER-True What decade did franchises begin to "take off"? - ANSWER-1950s __% of the world retail trade is in franchising. - ANSWER-44% The U.S. and Japan is the most entrepreneurial country in the world. - ANSWER-False The average number of failures before success is __. - ANSWER-7 A growing trend in the U.S. and Western Europe that involve a change in lifestyle according to the lecture: - ANSWER-Service, convenience The most common type of franchise in 2007 is: - ANSWER-Business and retail Which point allows franchises to take advantage of deep discounts by purchasing products in bulk? - ANSWER-Centralized purchasing Restaurants have the ability to use franchising as a competitive weapon. - ANSWER-True If a company does prove it will be a successful franchise by operating multiple locations, which of the following will most likely occur: - ANSWER-High failure rate Hotels/motels that are able to sustain through a rescission are the companies that prices are: - ANSWER-Lower to mid prices. Real estate companies have seen explosive growth through franchising. - ANSWER-True A trend common preference for Baby-boomers: - ANSWER-All of these Currently we are in a manufacturing based economy. - ANSWER-False American franchise systems enter foreign markets using: - ANSWER-Multiple different methods An example of a company adapting to a countries cultural (according to the lecture video) is: - ANSWER-A company in Spain offering wine on the menu It is the franchisor responsibility to know what products will sell in a particular market. - ANSWER-True Franchior and franchisee have a ________ relationship. - ANSWER-Joint 1 of the 5 advantages of being a franchisee is: - ANSWER-Quality control standards When agreeing to the terms of a contract for a franchise, you should consult a general attorney. - ANSWER-False In order to be a successful franchisor you should have an "entrepreneurial spirit". - ANSWER-True Why is it important for an operating system to be efficient within a company? - ANSWER-So the same OS can be used in a different location Which of the following should be considered when wanting to franchise a business? - ANSWER-(All of these) How does the service stand up? Have you assessed your business in a objective way or is this your personal opinion? How does the product/service compare to competitors? Are you price competitive because of pressure or demand? Often the best test to see if your product/service can meet the test of distance is to open a location further away from the first location - ANSWER-False Why is it important to know who your competition is? (Two answers) - ANSWER-To assess strengths and weaknesses