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mana 3325 chapter 8 Questions and Answers
(Expert Solutions)
Q: 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, 🗹🗹: D) fees; royalties
Q: 2) Franchises total annual sales represent more than ________ and employ nearly
________ workers in the Unities Sates in more than 300 industries.
A) $17 billion; 17 million
B) $120 billion; 8.2 million
C) $710 billion; 7.8 million
D) $225 billion; 21 million, 🗹🗹: C) $710 billion; 7.8 million
Q: 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
franchisor's trade name without distributing the products exclusively under the
franchisor's name.
A) Product distribution; trade name
B) Trade name; pure
C) Pure; trade name
D) Pure; product distribution, 🗹🗹: C) Pure; trade name
Q: 4) McDonald's is an example of a ________ franchise.
A) conversion forms
B) trade name
C) product distribution
D) pure, 🗹🗹: D) pure
Q: 10) Benefits of involvement in a franchise experience include ________.
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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, 🗹🗹: D) All of the above
Q: 11) Franchisors 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) Franchisors provide no assistance because having or finding financing is a
requirement for qualifying for a franchise., 🗹🗹: B) Assist in finding financing and
occasionally provide direct assistance in a specific area.
Q: 12) 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, 🗹🗹: C) centralized buying power;
economies of scale
Q: 13) 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, 🗹🗹: A) territorial protection
Q: 14) 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., 🗹🗹: D) All of the above increase the
rate of success.
mana 3325 chapter 8 Questions and Answers
(Expert Solutions)
Q: 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, 🗹🗹: D) fees; royalties
Q: 2) Franchises total annual sales represent more than ________ and employ nearly
________ workers in the Unities Sates in more than 300 industries.
A) $17 billion; 17 million
B) $120 billion; 8.2 million
C) $710 billion; 7.8 million
D) $225 billion; 21 million, 🗹🗹: C) $710 billion; 7.8 million
Q: 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
franchisor's trade name without distributing the products exclusively under the
franchisor's name.
A) Product distribution; trade name
B) Trade name; pure
C) Pure; trade name
D) Pure; product distribution, 🗹🗹: C) Pure; trade name
Q: 4) McDonald's is an example of a ________ franchise.
A) conversion forms
B) trade name
C) product distribution
D) pure, 🗹🗹: D) pure
Q: 10) Benefits of involvement in a franchise experience include ________.
, Page | 2
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, 🗹🗹: D) All of the above
Q: 11) Franchisors 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) Franchisors provide no assistance because having or finding financing is a
requirement for qualifying for a franchise., 🗹🗹: B) Assist in finding financing and
occasionally provide direct assistance in a specific area.
Q: 12) 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, 🗹🗹: C) centralized buying power;
economies of scale
Q: 13) 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, 🗹🗹: A) territorial protection
Q: 14) 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., 🗹🗹: D) All of the above increase the
rate of success.
