Question 16

2 out of 2 points

In franchising, ________ pay fees and royalties to a ________ in return for the right to sell its products or services under the franchiser's trade name and often to use its business format and system.

Answer

Selected Answer:

franchisee; franchiser

Correct Answer:

franchisee; franchiser

Question 17

0 out of 2 points

The primary market for U.S. franchisers is:

Answer

Selected Answer:

Canada.

Correct Answer:

Europe.

Question 18

0 out of 2 points

Territorial protection in franchising:

Answer

Selected Answer:

is basically every franchisee for him/herself.

Correct Answer:

varies according to industry.

Question 19

2 out of 2 points

Typically, the franchiser controls are very tight on what the franchisee:

Answer

Selected Answer:

sells in terms of the product or service they offer.

Correct Answer:

sells in terms of the product or service they offer.

Question 20

2 out of 2 points

________ franchising involves providing the franchisee with a complete business system--the established name, the building layout and design, accounting systems, etc.

Answer

Selected Answer:

Pure

Correct Answer:

Pure

Question 21

2 out of 2 points

The most litigated subject of the franchisee agreement is:

Answer

Selected Answer:

termination of contract.

Correct Answer:

termination of contract.

Question 22

2 out of 2 points

In view of the cause of most new business failures, probably the most valuable service provided franchisees by the franchiser is:

Answer

Selected Answer:

management training and experience.

Correct Answer:

management training and experience.

Question 23

2 out of 2 points

A significant advantage a franchisee has over the independent small business owner is participation in the franchiser's ________.

Answer

Selected Answer:

centralized and large-volume buying power

Correct Answer:

centralized and large-volume buying power

Question 24

2 out of 2 points

There are two main risks in purchasing a franchise. First, that of the franchiser's experience and business system, and second:

Answer

Selected Answer:

the entrepreneur's managerial skills and motivation.

Correct Answer:

the entrepreneur's managerial skills and motivation.

Question 25

2 out of 2 points

The failure rate for franchises is:

Answer

Selected Answer:

lower than the rate for all new businesses.

Correct Answer:

lower than the rate for all new businesses.

Question 26

2 out of 2 points

The payment the franchisee makes to the franchiser based on gross sales is:

Answer

Selected Answer:

a royalty.

Correct Answer:

a royalty.

Question 27

2 out of 2 points

In ________ franchising, a franchisee purchases only the right to become identified with the franchiser's trade name.

Answer

Selected Answer:

trade name

Correct Answer:

trade name

Question 28

0 out of 2 points

The primary advantage of buying a franchise over starting your own company is:

Answer

Selected Answer:

the absolute territory protection offered by all franchisers.

Correct Answer:

in the purchase of the franchiser's experience, expertise, and products.

Question 29

2 out of 2 points

________ franchising exists when a franchisee is licensed to sell specific products under the franchiser's brand name through a selective distribution system.

Answer

Selected Answer:

Product distribution

Correct Answer:

Product distribution

Question 30

0 out of 2 points

The ________ requires all franchisers to disclose detailed information on their operations at the first personal meeting or at least fourteen days before a franchise contract is signed or any money is paid.

Answer

Selected Answer:

Trade Regulations Rule

Correct Answer:

FDD