EEE 2023 FINAL EXAM QUESTIONS
WITH 100% CORRECT ANSWERS
Which foreign market entry strategy gives a firm total control over its foreign operations?
A. Franchising
B. Joint venture
C. Licensing
D. Wholly-owned subsidiary - Answer-D
_____, acquisitions, strategic alliances, joint ventures, licensing, and franchising are
examples of external growth strategies.
A. Market penetration
B. Mergers
C. Organic growth
D. Product development - Answer-B
Anton's Bakery made an outright purchase of Meg's Cakes. Anton's Bakery was
involved in a(n) __________.
A. turnkey project
B. joint venture
C. acquisition
D. strategic alliance - Answer-C
Which of the following is NOT an advantage of emphasizing external growth strategies?
A. Economies of scale
B. Diversification of business risk
C. Increased business complexity
D. Reducing competition - Answer-C
Pete Marsella entered into a franchising agreement where he was to pay an ongoing
royalty. Pete Marsella is the _________.
A. franchisor
B. franchisee
C. promoter
D. licensee - Answer-B
,The owners of Flip It Burgers, a potential franchisor, realized that in fast food, it is
important for the franchisor to provide a formula for doing business to the franchisee
along with training, advertising, and other forms of assistance. The right type of
franchise system for Flip It Burgers is a __________ franchise.
A. product and trademark
B. master
C. business format
D. process format - Answer-C
When, Angie Carmicheal, a former middle school math teacher buys the rights to open
five Kumon franchises within the city limits of Jacksonville, Florida, this is an example of
a(n) ________ franchise agreement.
A. master
B. standard
C. area
D. sub - Answer-C
A franchisee buys the rights to open five Jiffy Lube franchises in Grand Rapids,
Michigan, and also the rights to sell the rights to open 15 additional Jiffy Lube locations
in the same area to other individuals. This is an example of a(n) ___ franchise
agreement.
A. individual
B. area
C. territory
D. master - Answer-D
Which of the following is NOT a way franchisors can develop the potential of their
franchisees?
A. Reduce the royalty rate.
B. Provide mentoring that supersedes routine training.
C. Maintain the franchise system's integrity.
D. Keep operating manuals up-to-date. - Answer-A
Managers, because they are usually paid a salary, may not be as committed to the
success of their individual units as franchisees, who are in effect the owners of the units
they manage. This concept gave birth to ____ theory.
A. agency
B. ownership
C. managerial
D. transaction cost - Answer-A
, Franchisors are required by law to disclose all their costs in a document called the
______.
A. Franchise Disclosure Document
B. Franchise Contract
C. Master Contract
D. Uniform Product Code - Answer-A
Which of the following is NOT a question to ask a franchisor before buying a franchise?
A. What are the names, addresses, and phone numbers of existing franchisees in my
trade area?
B. What is the company's current financial status?
C. How do you train and mentor your franchisees?
D. How often will I be able to take a vacation? - Answer-D
The offer and sale of a franchise is regulated by the ______.
A.Federal Reserve Board (FRB)
B. Federal Trade Commission (FTC)
C. Justice Department
D. Securities and Exchange Commission (SEC) - Answer-B
Which of the following is NOT an industry where business format franchising
predominates?
A. Lodging
B. Retail food
C. Quick service restaurants
D. Computer software - Answer-D
Articles of incorporation - Answer-a written legal document that defines ownership and
operating procedures and conditions for the business
buyback clause - Answer-legally obligates departing founders to sell to the remaining
founders their interest in the firm if the remaining founders are interested
C Corporation - Answer-The most common type of corporation, which is a legal
business entity that offers limited liability to all of its owners, who are called stockholders
Closely held corporation - Answer-corporation that issues stock to only a few people,
often family members
Code of conduct - Answer-a statement that guides the ethical behavior of a company
and its employees
WITH 100% CORRECT ANSWERS
Which foreign market entry strategy gives a firm total control over its foreign operations?
A. Franchising
B. Joint venture
C. Licensing
D. Wholly-owned subsidiary - Answer-D
_____, acquisitions, strategic alliances, joint ventures, licensing, and franchising are
examples of external growth strategies.
A. Market penetration
B. Mergers
C. Organic growth
D. Product development - Answer-B
Anton's Bakery made an outright purchase of Meg's Cakes. Anton's Bakery was
involved in a(n) __________.
A. turnkey project
B. joint venture
C. acquisition
D. strategic alliance - Answer-C
Which of the following is NOT an advantage of emphasizing external growth strategies?
A. Economies of scale
B. Diversification of business risk
C. Increased business complexity
D. Reducing competition - Answer-C
Pete Marsella entered into a franchising agreement where he was to pay an ongoing
royalty. Pete Marsella is the _________.
A. franchisor
B. franchisee
C. promoter
D. licensee - Answer-B
,The owners of Flip It Burgers, a potential franchisor, realized that in fast food, it is
important for the franchisor to provide a formula for doing business to the franchisee
along with training, advertising, and other forms of assistance. The right type of
franchise system for Flip It Burgers is a __________ franchise.
A. product and trademark
B. master
C. business format
D. process format - Answer-C
When, Angie Carmicheal, a former middle school math teacher buys the rights to open
five Kumon franchises within the city limits of Jacksonville, Florida, this is an example of
a(n) ________ franchise agreement.
A. master
B. standard
C. area
D. sub - Answer-C
A franchisee buys the rights to open five Jiffy Lube franchises in Grand Rapids,
Michigan, and also the rights to sell the rights to open 15 additional Jiffy Lube locations
in the same area to other individuals. This is an example of a(n) ___ franchise
agreement.
A. individual
B. area
C. territory
D. master - Answer-D
Which of the following is NOT a way franchisors can develop the potential of their
franchisees?
A. Reduce the royalty rate.
B. Provide mentoring that supersedes routine training.
C. Maintain the franchise system's integrity.
D. Keep operating manuals up-to-date. - Answer-A
Managers, because they are usually paid a salary, may not be as committed to the
success of their individual units as franchisees, who are in effect the owners of the units
they manage. This concept gave birth to ____ theory.
A. agency
B. ownership
C. managerial
D. transaction cost - Answer-A
, Franchisors are required by law to disclose all their costs in a document called the
______.
A. Franchise Disclosure Document
B. Franchise Contract
C. Master Contract
D. Uniform Product Code - Answer-A
Which of the following is NOT a question to ask a franchisor before buying a franchise?
A. What are the names, addresses, and phone numbers of existing franchisees in my
trade area?
B. What is the company's current financial status?
C. How do you train and mentor your franchisees?
D. How often will I be able to take a vacation? - Answer-D
The offer and sale of a franchise is regulated by the ______.
A.Federal Reserve Board (FRB)
B. Federal Trade Commission (FTC)
C. Justice Department
D. Securities and Exchange Commission (SEC) - Answer-B
Which of the following is NOT an industry where business format franchising
predominates?
A. Lodging
B. Retail food
C. Quick service restaurants
D. Computer software - Answer-D
Articles of incorporation - Answer-a written legal document that defines ownership and
operating procedures and conditions for the business
buyback clause - Answer-legally obligates departing founders to sell to the remaining
founders their interest in the firm if the remaining founders are interested
C Corporation - Answer-The most common type of corporation, which is a legal
business entity that offers limited liability to all of its owners, who are called stockholders
Closely held corporation - Answer-corporation that issues stock to only a few people,
often family members
Code of conduct - Answer-a statement that guides the ethical behavior of a company
and its employees
