Franchising Chapter 15 2023/2024 Exam

Franchising, franchisor, franchisees, - ANSWER-___1___ is a form of business organization in which a firm that already has a successful product or service (___2___) licenses its trademark and method of doing business to other businesses (___3___) in exchange for an initial franchise fee and ongoing royalty. franchise - ANSWER-The word _____ comes from an old dialect of French and means "privilege" or "freedom." two types of franchises - ANSWER-The _____ are as follows: 1. product and trademark franchise 2. business format franchise product and trademark franchise - ANSWER-A _____ is an arrangement under which the franchisor grants to the franchisee the right to buy its products and use its trade name. One of the two types of franchises. business format franchise - ANSWER-The second type of franchise, the ___2___, is by far the more popular approach to franchising and is more commonly used by entrepreneurs and entrepreneurial ventures. In a _____, the franchisor provides a formula for doing business to the franchisee along with training, advertising, and other forms of assistance. three types of franchise agreements - ANSWER-The _____ are as follows: 1. individual franchise agreement 2. area franchise agreement 3. master franchise agreement individual franchise agreement - ANSWER-An _____ involves the sale of a single franchise for a specific location. One of the three types of franchise agreements. area franchise agreement - ANSWER-An _____ allows a franchisee to own and operate a specific number of outlets in a particular geographic area. One of the three types of franchise agreements. master franchise agreement - ANSWER-Finally, a _____ is similar to an area franchise agreement, with one major difference. A master franchisee, in addition to having the right to open and operate a specific number of locations in a particular area, also has the right to offer and sell the franchise to other people in its area. One of the three types of franchise agreements. Under a _____, the U.S. firm grants the right to an individual or company (the master franchisee) to develop one or more franchise businesses and to license others to develop one or more franchise businesses within the country or territory. One of the three methods U.S. franchisors typically use to structure their expansion into a foreign country.