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With regard to the evaluation of franchisee performance and degree of control:


A) The generally low level of control that a franchisor has over the franchisee enables the franchisor to request and receive a great deal of performance data.
B) The generally low level of control that a franchisor has over the franchisee suggests that the franchisor to can only request performance data infrequently.
C) Franchisors are able to request and receive various data except data that pertains to cleanliness of facilities and employee training procedures.
D) Franchisor access to franchisee performance data is similar to data in conventional channels by channel members.
E) The high degree of control by the franchisor helps to provide a guaranteed, detailed, and regular flow of performance data that benefits both parties.

F) All of the above
G) B) and C)

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As it pertains to the scope and importance of franchising, which of the following statements is most accurate?


A) The number of jobs provided by franchised businesses is slightly less than those provided by durable goods manufacturing.
B) Franchising and franchise channels continue to grow dramatically
C) While the number of franchises has grown, the number of kinds of franchises has remained constant
D) Franchising is an American business model that does not work well outside the U.S.
E) Franchising and franchising channels are not growing in other developed countries.

F) A) and C)
G) B) and E)

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Which of the following statements best describes franchise channel structure?


A) It is generally structured between domestic and international channels.
B) It has a negative image in marketing
C) It has had a detrimental effect on customer participation
D) It is structured between single-unit and multi-unit franchises.
E) It is the basis for mass merchandising.

F) C) and D)
G) A) and E)

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The downsides for franchisees participating in franchise channels include all of the following except:


A) The obligation to provide a percentage of their gross revenues to the franchisor as royalty payments.
B) If a one member of the franchise system generates negative publicity, all franchisees in the system may suffer.
C) Negative halo effect.
D) Limited independence of the franchisee.
E) Increased regulatory scrutiny.

F) B) and C)
G) C) and E)

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One downside for franchisors participating in franchise channels is:


A) Increased management flexibility
B) Low expectations among franchisees
C) Increased regulatory scrutiny.
D) Limited independence of the franchisee.
E) All of the above are about equal.

F) B) and C)
G) D) and E)

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The franchise distribution system is composed of approximately _________ franchise business establishments that provide more than 11 million jobs.


A) 900
B) 9,000
C) 90,000
D) 900,000
E) 9,000,000

F) C) and D)
G) A) and B)

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Franchise fees:


A) Compensate the franchisee for the use of its trademark.
B) Pay for all physical assets (e.g., equipment and building) , needed to operate the franchise.
C) Is usually a one-time flat fee paid by franchisees to franchisors.
D) Is based on a percentage of the franchisee's gross sales.
E) Is a government tax to register the franchise.

F) All of the above
G) A) and D)

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In product distribution franchises:


A) Franchisors provide significant operational assistance to franchisees.
B) The franchisor licenses its trademarked products to franchisees.
C) The greatest benefit to franchisors is the marketing assistance they receive from franchisees.
D) Franchisors spend billions of dollars annually to keep franchisees trained.
E) Franchisees provide significant operational assistance to franchisors.

F) A) and B)
G) A) and C)

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Three major reasons that explain why franchisors distribute via franchise channels are:


A) (1) reduce uncertainty; (2) obtain training; and (3) obtain assistance from franchisee.
B) (1) capital advantages, (2) potential to reduce distribution costs, and (3) possible high level of managerial motivation fostered by franchising.
C) (1) capital advantages, (2) obtain training; and (3) obtain assistance from franchisee
D) (1) capital advantages, (2) potential to reduce distribution costs, and (3) obtain assistance from franchisee.
E) (1) reduce uncertainty; (2) obtain training; and (3) possible high level of managerial motivation fostered by franchising.

F) C) and D)
G) All of the above

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