MGMT 3850 CHAPTER 6 HOMEWORK QUESTION AND ANSWERS | COMPLETE GUIDE

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MGMT 3850 CHAPTER 6 HOMEWORK QUESTION AND ANSWERS Essentials of Entrepreneurship & Small Business Mgmt., 7e (Scarborough) Chapter 6 Franchising and the Entrepreneur 1) A franchise is a system ... of distribution in which semi-independent business owners pay ________ and ________ to a parent company in return for the right to become identified with its trademark, to sell its product or services, and often to use its business format and system. A) a percentage of sales; royalties B) upfront costs; incremental costs C) royalties; monthly consulting charges D) fees; royalties 2) Franchises total annual sales represent nearly ________ percent of total annual sales and employ nearly one in ________ workers in the Unities Sates in more than 300 industries. A) 8: 17 B) 12: 8 C) 17; 8 D) 2: 21 3) ________ franchising involves providing the franchisee with a complete business system, with an established name, the building layout and design, accounting systems, and other elements while ________ franchising allows the franchisee to use the franchiser's trade name without distributing the products exclusively under the franchiser's name. A) Product distribution; trade name B) Trade name; pure C) Pure; trade name D) Pure; product distribution 4) McDonald's is an example of a ________ franchise. A) conversion forms B) trade name C) product distribution D) pure Answer: D Diff: 2 Page Ref: 196-197 AACSB: Reflective Thinking Learning Obj.: 1 5) Benefits of involvement in a franchise experience include: A) management training and support. B) brand name appeal and standardization of goods and services. C) national advertising exposure and financial assistance. D) All of the above 6) Which of the following is not a potential advantage of franchising for the franchisee? A) Management training and assistance B) National advertising program C) Centralized buying power D) Limited product line 7) Franchisers generally do which of the following regarding financial assistance to franchisees? A) Provide direct financing. B) Assist in finding financing and occasionally provide direct assistance in a specific area. C) Waive royalty fees for franchisees not making an adequate profit. D) Franchisers provide no assistance because having or finding financing is a requirement for qualifying for a franchise. 8) A significant advantage a franchisee has over an independent business is the participation in the franchisor's ________ largely due to the ________ the franchise offers. A) centralized buying power: buying insight B) centralized buying power; brand protection C) centralized buying power: economies of scale D) economies of scale: territorial protection 9) Some franchisors offer ________ to give existing franchisees the right to exclusive distribution of brand name goods or services within a particular geographic area. A) territorial protection B) exclusive rights C) guaranteed protection D) exclusivity 10) The failure rate for franchises is: A) higher than the average rate for new businesses. B) no different from the rate for new businesses. C) lower than the average rate for new businesses. D) indeterminable because of the Right to Privacy Act. 11) A recent study reports that the success rate of franchisees increases when a franchise system: A) requires franchisees to have prior industry experience. B) requires franchisees to actively manage their operations. C) has built a strong brand name with training programs to improve knowledge and skills. D) All of the above increase the rate of success. [Show More]

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