George Rose/Contributor/Getty Images News. B) There are some instances in which franchising is not appropriate. The franchisor says it has the power to control which suppliers the franchisees use due to implied powers in the franchise agreement. He is considering applying to small firms because he knows that small businesses have traditionally added _____ new jobs to the economy. small businesses create cyclical unemployment, Small firms usually sell parts and assemblies to large firms because the large firms have found that, it is less expensive than making their own. He wants the business to succeed. B) brand name appeal and standardization of goods and services. Further Explanation: Franchise: Franchising is a form of business where the franchisor (who has an established brand name) gives the right to the franchisee to use its trademark, products, services, and also provide training and assistance for operating the business. What is the idea of the Price value proposition? What is the name of the business agreement Henry would sign? Where is Ellis most likely to go for advice and guidance about running the outlet? Maria has purchased a Subway franchise. Helps the franchiser to develop more efficient and innovative policies . 0 votes. Franchisors benefit from the franchise agreement because they have. Which of the following is a disadvantage of owning a franchise? This is called franchising. Franchising is advantageous to both franchisee and franchisor in the following ways. B)An offer of direct financing of a specific element of the franchise package. As many franchises your business have, it’s you, the boss. Which of the following is not an advantage of a franchise? For the franchisee, there are no start-up expenses. * 2. You are not required to have business experience to own and run a franchise business. A) lack of control B) workload C) competition D) brand recognition E) royalty fees. An area level franchise that allows the franchisee to own and operate a specific number of outlets in a particular geography. Which of the following is an advantage to the franchisee? A)Claims that the franchise contract is a standard agreement and that there is no need to read it or have an attorney look it over. At the preliminary stage, you have to pay initial fees and royalty fees and later you have to share a part of your profit with the parent company. And a franchisor, who sells the right to use a business idea in a particular location. Understanding the advantages and disadvantages of franchising will enable you to decide if franchising is a suitable option for your business expansion. Franchising is seen by many as a simple way to go into business for the first time. Which of the following statements is incorrect regarding franchising? The franchise with the most outlets in the United States is. Advantages: The first advantage of franchising your business is that you already got loyal customers and fame. A ________ is a need that is sufficiently pressing to direct a person to seek satisfaction. When problems arise, the franchisee can obtain guidance and advice from the franchiser. The Grant: A franchise involves the franchisor in granting the franchisee certain rights over a certain area for a … iv. Which of the following is NOT a typical supply chain member? Which of the following organizations can assist him? He works many hours from January through April but in May takes a month-long vacation and the rest of the year works part-time. A) product idea B) product concept C) screened product D) test market E) prod... A company's channel decisions directly affect every ________. Business students at universities can work together to provide management counseling to small businesses in their community. 61) Which of the following is an advantage of franchising to the franchisor? Difficult in motivating franchisees: Generally, a franchise is an agreement for a specific period ranging between five and ten years. A) In some industries, such as automotive and retail food, franchising is a dominant form of business ownership and growth. Brent and Wendy plan to open a new business. Who is correct? 1. It’s Less Expensive to Start. b. The most common form of franchising today is one in whic. Costs may be higher than you expect. A wholesaler purchases products in quantity from _____ and then resells them to retailers. What is the name of that program? Franchising is not without its challenges. High risk in overseas expansion c. Little control over marketing d. Creation of a monopoly Answer: c. Little control over marketing. 3. A. The franchise agreement usually includes restrictions on how you can run the business. a. Franchisors gain distribution without the high cost of constructing and operating their own outlets. What is the largest guaranteed loan she could be granted? Select the true statement concerning test marketing. Limited creativity. Brenda has a small grocery store in a residential neighborhood where she primarily sells staples to the people who live in the area. Opening a franchise is usually less risky than setting up as an independent retailer. Access to Capital . Marriage, childbirth, and divorce constitute the ________ that shape the consumption pattern of individuals. Godfrey has just graduated from business school and is seeking employment. 91.Which of the following is an advantage of franchising as a mode of entry into foreign markets? Which of the following small businesses could be categorized as being in the distribution industry? B. Sarah has opened her own cosmetology business in a small shopping center with a lot of foot traffic. As a class assignment, business students were told to prepare a business plan for a business they would like to own. Franchisees may be able to start a business with limited capital. The following are not so many disadvantages but limitations, which characterise how a franchising system works. a. Franchisors gain distribution without the high cost of constructing and operating their own outlets. This program is part of the. she will work very hard putting in long hours about six days a week, The SBA assists small-business owners entering the world markets by doing all of the following except, offering long term loans to US business owners. Increasing Brand Equity. Franchising is not without its challenges. Certainly, the majority of people would choose to start their own business rather than get tied in with a franchise agreement. Ten advantages of franchising. Which of the following best describes the industry she operates in? The management regulation is not an advantage of franchising. Which of the following products is an example of intangible dominant? Jennifer and Raleigh are considering starting a small business and are weighing the pros and cons of doing so. The main advantage is clearly the security, but the disadvantage of the costs and reduced profit and control might put people off. Jack owns a franchise. Freddie's Fenders is seeking a loan from the SBA. a. Franchisor has more capital to use for advertising b. Advantages to the franchisor Cost-effective growth . His actions are possible because small businesses. Top Advantages of Franchising Your Business . Following are the 15 Advantages and Disadvantages of Franchising your Business (franchisor’s perspective). Here’s why: You don’t need previous business experience; That’s right. Owning a franchise can be a shortcut to success when you're starting a business, but there are franchising advantages and disadvantages to consider. Following are the 15 Advantages and Disadvantages of Franchising your Business (franchisor’s perspective). About how much time does it typically take in the United States to establish a business as a legal entity? Many well-known high street opticians and burger bars are franchises. The management regulation is not an advantage of franchising. All of the following are true about small business except. The franchising system enables you to occupy one post with ease. This question is part of Forms of Business Organisation. Now the big advantages of franchising are time, people and money. the franchisor still maintains a great deal of control. d. Consumers are assured of uniform product quality. Advantages of Franchising. Franchisees may be able to start a business with limited capital. D) Franchising, by its very nature, involves the sharing of knowledge between a franchisor and a franchisee. What is an advantage of franchising to the franchisor? Which of the following is NOT an advantage of franchising? Milkshake Lending Company is a small privately owned firm providing venture capital to small businesses. Most franchisors encounter the following disadvantages. introduction-to-business; 0 Answers. d. This is because all expenses of selling are borne by the franchise. A franchise is a joint venture between: A franchisee, who buys the right from a franchisor to copy a business format. This is an example o. Craig has $60,000 to invest in a new small business. This further also helps in building a brand name, increasing goodwill and reaching more customers. Finally, let’s not forget that while franchising is often a lower-cost means of expanding a business, it is not a no-cost means of expansion. Intermediaries play an important role in matching ________. i. Coattail effects * 4. Franchise Agreement: The following comments generally apply not only to unit franchises, but also to development and master franchise agreements, unless expressly stated otherwise. The franchisor gets major tax advantages. The process of selecting one or more market segments to enter is called ________. Which is the most commonly used measure in media planning. A product franchise is a franchising agreement where manufacturers allow retailers to distribute products and use names and trademarks. A new franchise has to act on the directive of its parent company. Explanation: D) Lack of control, heavy work load, competition from other franchisees, and royalty fees are all potential disadvantages of franchising. A company's channel decisions directly affect every ________. A potential franchisor is concerned that the franchisees will destroy the reputation of the company and end up hurting his business. Leticia would like to start a business and has investigated starting her own or buying a franchise. Next Question » Search Marketing Questions Here. Which of the following is NOT an advantage of a franchise? Most franchisors encounter the following disadvantages. Samantha would like to get a small business loan from the SBA. Read more advantages of franchising. Franchisees may be able to start a business with limited capital. Option E is correct. They meet with a business planner who helps them compile a business plan. High development costs b. Which is NOT an advantage of the franchisor in franchising? Which of the following is a disadvantage of licensing and franchising? Franchising involves: a) the transfer of patented information and trademarks, information and know-how as well as information needed to sell a product or service. b. The franchisee keeps profits from the outlet B. If he seeks the average-size SBA-guaranteed business loan he will borrow, Money invested in small, new, or struggling firms that have the potential to become very successful is called. For example, your franchise will reap the benefit of the parent company's national marketing campaigns. https://quizlet.com/236480779/ent-3172-chapter-1-12-terms-flash-cards Companies that invest in small businesses. Following are some of the advantages of franchising a business: i. Disadvantages of franchising to Franchisor. 4. Capital. Which of the following would not be a good reason to start a small business? A Funeral b. The franchisee can capitalize on the business experience of others. Darrel's Donuts has been operating quite successfully for two years. The franchisor can reach new markets. A ________ is the set of all products and items a particular seller offers for sale. Strategic Elements of Competitive Advantage. An attractive idea must be developed into a ________. It’s faster because other people are out there helping you in the process. a. A) psychological life cyc... A ________ is a need that is sufficiently pressing to direct a person to seek satisfaction. * 5. means you do not have to spend your own capital or request additional funding from banks or investors in order to grow your business Which of the following is NOT a disadvantage of franchising? D) All of the above. Advantages to Franchisees. You can switch careers easily when changing industries, which is now commonplace for most entrepreneurs. You don’t have to build from scratch. Fran's Fancy Frocks, a retail clothing store, may not exceed ___ in annual sales to qualify as a small business. This is higher than _____, the amount the Census Bureau and Federal Reserve say 50 percent of all new businesses begin with.. A(n) ____ is a carefully constructed plan for an individual starting a business. Below are 5 advantages of franchising. Juan is most likely a franchisee in the ___ industry. Disadvantages of franchising to Franchisor. Franchising allows aspiring entrepreneurs to start a new business without incurring the same level of risk as a brand-new venture. C) New technologies are often introduced through franchise systems. His customers often talk about trikes. Which of the following statements most accurately describes the success rate of franchises? Advantages: The first advantage of franchising your business is that you already got loyal customers and fame. Following are, for example, the distinct advantages that franchising provides to the franchisee: ADVERTISEMENTS: (i) Franchising makes the task of getting started easier because the franchisee gets a business format- already market tested and found to work. Franchising is an excellent way of expanding a business that is already successful. Which of the following is NOT an advantage of franchising? The primary advantages for most companies entering the realm of franchising are capital, speed of growth, motivated management, and risk reduction -- but there are many others as well.. Then, which of the following is a disadvantage of a corporation quizlet? A) Franchising is growing in popularity in the United States. One of the special focus areas of the SBA is to, assist minorities wanting to start or expand small businesses, A business seeking a loan through the Small Business Administration will actually be given a loan through. When Reno purchases the McDonald's she will be expected to supply, labor and capital and will own and operate the outlet. If you are looking to sell franchises, a franchisee is going to go out and find a site, they’re going to negotiate the lease, they’re going to hire the people, they’re going to train the people, they’re going to hire the contractor. If you've ever wondered how to start a franchise, where to find franchisees, how the franchisor/ franchisee relationship should work, or what to ask before purchasing a franchise, you've come to the right place. Buying power. The franchiser is relieved of many of the costs and risks of opening a foreign market on its own. A business format franchise is a franchising arrangement where the franchisor provides the franchisee with an established business, including name and trademark, for the franchisee to run independently. Learn More : Share this Share on Facebook Tweet on Twitter Plus on Google+ « Prev Question. C)Not providing detailed operational information until 10 days before signing the contract. She is concerned she may not be given a loan and researches the subject, discovering that in 2013, the SBA data showed that women-owned businesses are. Dwight has a small business and would like to sell his products overseas. One of the main reasons she may have made the move was. Macy argues that its primary function is to guarantee loans. This consumer expectation is also one of the potential major frailties of any chain, including franchising. Which of the following is something that would not be included in the plan? Franchising allows companies to leverage off the assets of franchisees. Also Know, what are 3 advantages of franchising? franchises have a very high success rate compared to other small businesses. A. growth with minimal capital investment B. higher marketing and promotional costs C. royalties D. the minimal number of regulations regarding franchising. The party granting the license is the. The appeal of a business format franchise is understandable. B) There are some instances in which franchising is not appropriate. Which major question in his business plan does this statement address? Stuart has $50,000 to start a new business. Automobile dealerships and ___ were the primary uses for franchises in the early days of franchise agreements. Which of the following organizations would most likely give her the help she needs? C) Franchising is a relatively new form of business organization. Any new franchise you sell will start giving you profit as you have already build trust among your customers. Hence, buying a franchise is so far safer than trying to start a business. It is most likely that, it may take several years for this business to begin to show a profit, Barrack opens a bagel shop and at the end of each day has five dozen bagels left over that he cannot sell the next day due to health code restrictions. 6) Which of the following is not a potential advantage of franchising for the franchisee? What are the advantages of franchising? A) Intrapreneurship B) Partnership C) Spin-offs D) Franchising. Macy because the SBA's primary financial function is to guarantee loans. 1. A. A) reseller B) supplier C) wholesaler D) retailer's creditor E) go... An attractive idea must be developed into a ________. answered Jun 15, 2016 by DaenaDanes . Because franchise owners are able to capitalize on consumers' familiarity with the franchise company's name, brand recognition would be an advantage rather than a disadvantage of franchising. fast and selective distribution of products. Advertising can be one of the biggest expenses for any new business and for … Question 5. Which of the following products is an example of intangible dominant? C) There is seldom any risk of franchisees becoming future competitors. Star power. Corporate brand identities have proven success in the marketplace. The process of selecting one or more market segments to enter is called ________. Under franchising, the service provider develops the business format and licenses it to others. For one, the franchisor is not responsible for the day-to-day management of the individual franchise units. Darrel is considering expanding the business by franchising. it is possible to start a business with limited capital. Which of the following businesses would most likely be included in the production industry? Richard orders some Harley-Davidson Trikes for his inventory. Because of disputes between franchisors and franchisees, a program was instituted to arbitrate them. They have heard that the disadvantages of small businesses include all of the following except. The franchisor will not be involved in the day-to-day operations of each franchised outlet. Best answer. The franchiser is allowed to take profits out of one country to support competitive attacks in another. However you should be aware that franchising is not suitable for every business. Firstly, franchising is a great way to expand a business without incurring additional costs on expansion. Decreased profits are considered one of the main disadvantages of franchising. The advantages of franchising. 5) Benefits of involvement in a franchise experience include: A) management training and support. This company could also be referred to a. Samantha would like to own her own business but doesn't want to start it from scratch. Which of the following is not a benefit of franchising to the franchisor? The franchisor pays for advertising C. The franchisor does not manage these new outlets D. Banks are often willing to lend to franchisees due to relatively low risk. Anastasia has started a dry cleaning business but is having difficulties with various aspects of organizing and operating the business. Sylvia has an SBA-guaranteed business loan for the average life of such loans. Which of the following is not an advantage of exporting? Richard has a motorcycle and ATV store. Portica knows the customers of her hat shop by name and knows each of their preferences. Asked by Katecambel, Last updated: Sep 24, 2020 + Answer. Any new franchise you sell will start giving you profit as you have already build trust among your customers. This is a ___ business. A franchisor benefits from the motivation of the franchisee c. Outlets are maintained according to standards d. The franchise can start a business with limited capital e. Distribution of products can expand at a faster rate He states in the plan, "This business will serve over 400 customers by the end of the year and employ ten full-time employees." Ellis owns a Subway franchise. Following are the forms of franchise agreements under which franchising is practiced: 1. c. Franchisees can benefit from the business experience of others. Reno is a. Darrel is considering expanding the business by franchising. There are approximately ___ businesses in the United States. Mary's Models is a successful model airplane store. This is not what happens in franchising. It is appealing to become your own boss and run a business under a popular brand, right? This desire is referred to as. asked Jun 15, 2016 in Business by Federico. Darrel's Donuts has been operating quite successfully for two years. Pizza: Franchising 3) While there may be many advantages to franchising, which of the following is NOT an advantage? have the ability to quickly adapt to change. Franchising; Contract manufacturing; Joint venture Answer: (c) Contract manufacturing; Question 3: When two or more firms come together to create a new business entity that is legally separate and distinct from its parents it is known as. O A. Each of the following is a type of intellectual property except _____. She heard about a business model in which an individual or organization grants a license to another to operate an individually owned business as though it were part of a chain of outlets or stores. The franchisee will be buying into a established brand so there will be less risk of the business failing because they have a good repuattion and have a product which consumers will demand. What advantage of a small business does Bill enjoy? c. Franchisees can benefit from the business experience of others. d. Franchises generally have lower failure rates than independent retail establishments. The franchisor will not risk its capital and will not have to sign lease agreements, employment agreements, etc. The advantages and disadvantages vary depending on: If You Want to Franchise Your Business – So‚ if you are a successful business owner and you want to expand then‚ naturally‚ franchising is an option that you will want to consider. Provides initial support, such as training, financing, and operational, and management assistance, to franchisees . Advantages of Franchising. asked Apr 30, 2016 in Business by GlamPunk. Your franchise will benefit from the collective buying power of the parent company, which passes on the savings to franchisees. As well as the initial costs of buying the franchise, you pay continuing management service fees and you may have to agree to buy products from the franchisor. Which of the following is not an alternative to entrepreneurship? Answer: (c) Limited presence in foreign markets. While many franchising publications list numerous benefits to franchising your business, a careful review reveals that the following six keep appearing near the top of every list. Buying a franchise can be a quick way to set up your own business without starting from scratch. Which of the following is NOT an advantage of franchising for the franchisee? а increased buying power income from franchisee fees and royalties c high franchisee motivation d decreased cost savings rapid, low-cost market expansion Gestion 3 of 5 (0 completed) $ = e 2 A 00 6:18 PM 202020 4) Owning a franchise is typically costly and labor- intensive. According to the SBA, in 2012 women were 51 percent of the U.S. population, and owned at least ___ percent of all small businesses. d. Franchises generally have lower failure rates than independent retail establishments. Consumers are assured of uniform product quality. Hence, buying a franchise is so far safer than trying to start a business. But under specific circumstances like transparency, favourable legal conditions, financial means and proper market research, franchising can be a vehicle of success for both franchisor and franchisee. Which of the following statements is incorrect regarding franchising? He has misjudged, In order to operate a successful small business, the entrepreneur should be most concerned with, Jeff Katz, the founder of Orbitz,Inc., when speaking about new businesses recently said, "A flat checkbook is the mother of invention." the ability to build personal relationships with the owners and other employees. Franchisees are not only judged by their performance, but they are also judged by the performance of other franchisees. B) franchising 3. C) an author’s unpublished book 2. Which of the following is NOT a typical supply chain member? For Jerry's Automobile Parts Fabricating business to qualify as a small business, it can employ no more than ___ people. Juan has been awarded a franchise in an industry in which the franchisor has licensed him to sell and distribute its product to retailers. Although the franchisor receives a small percentage of the revenues still the new franchise must share its profits. Marriage, childbirth, and divorce constitute the ________ that shape the consumption pattern of individuals. Individual franchise agreements where it involves the sale of a single franchise for a specific location. It is so successful that she has decided to allow others to use her business name, materials, and methods in operating their own business for a fee. You stop by a Carl's Jr. fast food restaurant and notice that they also have Green Burrito Mexican food. b. 2. Which of the following agencies will most likely arbitrate this dispute? The inherent risks usually associated with expansion are thereby reduced. Answer. And you should understand those well before buying into someone else’s business. The marketing research process is presented to you in your text as: UPS is a company that hires a very high number of __________ and _________ workers. 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