Which of the following is NOT a disadvantage of franchising? Fran's Fancy Frocks, a retail clothing store, may not exceed ___ in annual sales to qualify as a small business. The drawbacks of franchising. The business that represents 99.7 percent of all employers in the United States is a. A. Advantages to Franchisees. Conducting Marketing Research and Forecasting Demand, Consumer-Industrial and Government Markets, Executing Strategy Through Organizational Design. Many well-known high street opticians and burger bars are franchises. Matilda would like to open an ice cream and sweet treats store but she will need a loan to do so. Next Question » Search Marketing Questions Here. How many years will she have to repay the loan? B) brand name appeal and standardization of goods and services. Franchising is advantageous to both franchisee and franchisor in the following ways. A. growth with minimal capital investment B. higher marketing and promotional costs C. royalties D. the minimal number of regulations regarding franchising. b. Buying a franchise can be a quick way to set up your own business without starting from scratch. A) product idea B) product concept C) screened product D) test market E) prod... A company's channel decisions directly affect every ________. Reno decides to purchase and operate a McDonald's restaurant. success will cause another outlet to be opened nearby. franchisor supplies brand names, techniques, or other services instead of a complete product. B) franchising 3. 2. Reno is a. About how much work should she expect to do to make the franchisee successful? (a) Easier way to enter into international markets (b) Comparatively lower risks (c) Limited presence in foreign markets (d) Less investment requirements . A company's channel decisions directly affect every ________. 91.Which of the following is an advantage of franchising as a mode of entry into foreign markets? A) psychological life cyc... A ________ is a need that is sufficiently pressing to direct a person to seek satisfaction. What is the largest guaranteed loan she could be granted? c. Franchisees can benefit from the business experience of others. b) the use of franchising for licensing new technologies in global markets. Following are the 15 Advantages and Disadvantages of Franchising your Business (franchisor’s perspective). This demonstrates which advantage of a small business? e. Franchisees must pay to use the franchisor's name, products, and assistance. Franchise Agreement: The following comments generally apply not only to unit franchises, but also to development and master franchise agreements, unless expressly stated otherwise. Which of the following could he use to protect his interests?. The most obvious benefit of franchising to a prospective franchisor is the ability to expand a business by utilising the manpower and capital of others. This program is part of the. 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. 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. 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. Which of the following is an advantage to purchasing a franchise?. Advantages: The first advantage of franchising your business is that you already got loyal customers and fame. Franchisors benefit from the franchise agreement because they have. He states in the plan, "This business will serve over 400 customers by the end of the year and employ ten full-time employees." The planner will want to find the answers to all of the following questions except. iv. asked Jun 15, 2016 in Business by Federico. What are the typical payments paid by a franchisee to a franchisor? Advertising can be one of the biggest expenses for any new business and for … 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. Leticia has always wanted to own her own restaurant but has read that restaurants have a very high failure rate. This further also helps in building a brand name, increasing goodwill and reaching more customers. 3. Advantages to the franchisor Cost-effective growth . ADVERTISEMENTS: iii. When problems arise, the franchisee can obtain guidance and advice from the franchiser. The franchiser is allowed to take profits out of one country to support competitive attacks in another. Which of the following is something that would not be included in the plan? a. Who is correct? Juan is most likely a franchisee in the ___ industry. For Jerry's Automobile Parts Fabricating business to qualify as a small business, it can employ no more than ___ people. Which of the following is a disadvantage of licensing and franchising? Hired managers do not have the same dedication as the owner and moreover, there is a chance that they could be recruited by the competitors if they are good. Which of the following products is an example of intangible dominant? 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? Franchised outlets are usually more successful than independently owned businesses with respect to long-term survival. The franchisor gets major tax advantages. Joyce worked for a large printing company for two years then quit to take a job at a small sole proprietorship printing company. i. Pick the correct phrase from the following that best characterizes the relationship between franchisors and franchisees. A) channel member B) marketing decision C) customer's choices ... A ________ is the set of all products and items a particular seller offers for sale. Consumers are assured of uniform product quality. This is called franchising. asked Jun 18, 2019 in Business by GirlyGirl. https://quizlet.com/236480779/ent-3172-chapter-1-12-terms-flash-cards Macy because the SBA's primary financial function is to guarantee loans. Difficult in motivating franchisees: Generally, a franchise is an agreement for a specific period ranging between five and ten years. The franchiser is relieved of many of the costs and risks of opening a foreign market on its own. Intermediaries play an important role in matching ________. Franchisees may be able to start a business with limited capital. And you should understand those well before buying into someone else’s business. 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. He was referring to, the reality that small business workers are more innovative than workers in large businesses, The invention of insulin and power steering by small businesses are examples of the ability of small businesses to provide, Increases in productivity for the past 200 years are characterized by, new ways to do a job with less effort and at a lower cost. He wants the business to succeed. The most common form of franchising today is one in whic. Helps the franchiser to develop more efficient and innovative policies . 0 votes. 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. Hence, buying a franchise is so far safer than trying to start a business. Answer: e. Franchises must pay to use the franchisor's name, products, and assistance. Frieda's Freestyle Skateboards has many customers but is not dominant in its field. Which of the following is not an alternative to entrepreneurship? he can ensure that the new stores are operated according to his own standards through the franchise agreement. the ability to build personal relationships with the owners and other employees. Which of the following is not a benefit of franchising to the franchisor? Disadvantages of franchising to Franchisor. Any new franchise you sell will start giving you profit as you have already build trust among your customers. Understanding the advantages and disadvantages of franchising will enable you to decide if franchising is a suitable option for your business expansion. D) All of the above. Which of the following is NOT an advantage of franchising? Darrel is considering expanding the business by franchising. Which of the following is NOT an advantage of a franchise? Franchising is seen by many as a simple way to go into business for the first time. 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. Following are some of the advantages of franchising a business: i. 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. Marriage, childbirth, and divorce constitute the ________ that shape the consumption pattern of individuals. Macy argues that its primary function is to guarantee loans. fast and selective distribution of products. 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. 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. Answer. means you do not have to spend your own capital or request additional funding from banks or investors in order to grow your business All of the following are true about small business except. 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 potential franchisor is concerned that the franchisees will destroy the reputation of the company and end up hurting his business. One of the major advantages of owning a franchise is that you … Poorly performing fellow franchisees or company‐owned locations damage a franchisee’s business even where they do not share the same market. Opening a franchise is usually less risky than setting up as an independent retailer. What advantage of a small business does Bill enjoy? The first thing f ranchises offer franchisees is a strategic identity that is not only effective, but it also has a cumulative market impact. The franchise with the most outlets in the United States is. Which of the following is not an advantage of exporting? The amount of money it takes to get a new business off the ground can … disagreements between the two parties have increased and contract disputes are causing many lawsuits. Ten advantages of franchising. This is because all expenses of selling are borne by the franchise. Which of the following statements is incorrect regarding franchising? 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. A ________ is a need that is sufficiently pressing to direct a person to seek satisfaction. Thus, inventory and supplies cost less for a franchise than for an independent company. c. The franchisee has access to the franchisor's knowledge and resources. For example, your franchise will reap the benefit of the parent company's national marketing campaigns. 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. 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. This is a ___ business. The most common barrier to expansion faced by today’s small businesses is lack of access … The table below shows the advantages and disadvantages of franchising for the franchisee: Advantages Disadvantages; A successful franchise means that the business model is proven: Franchise fees and royalties can be a major expense: Franchisees don’t have to build the brand or set up the systems and processes to run the business efficiently answered Jun 15, 2016 by DaenaDanes . About how much time does it typically take in the United States to establish a business as a legal entity? Which of the following is an advantage to the franchisee? Which major question in his business plan does this statement address? O A. Godfrey has just graduated from business school and is seeking employment. d. Franchises generally have lower failure rates than independent retail establishments. Stuart has $50,000 to start a new business. Any new franchise you sell will start giving you profit as you have already build trust among your customers. FAQs About Franchising FAQs About Franchising 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. The Grant: A franchise involves the franchisor in granting the franchisee certain rights over a certain area for a … 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. It’s Less Expensive to Start. Brenda has a small grocery store in a residential neighborhood where she primarily sells staples to the people who live in the area. This question is part of Forms of Business Organisation. 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. ______ are people within a reference group who, because of special skills, knowledge, personality, or other characteristics, exert influence on others. Which of the following organizations would most likely give her the help she needs? b. For one, the franchisor is not responsible for the day-to-day management of the individual franchise units. B)An offer of direct financing of a specific element of the franchise package. Sarah has opened her own cosmetology business in a small shopping center with a lot of foot traffic. However you should be aware that franchising is not suitable for every business. Franchising is an excellent way of expanding a business that is already successful. And a franchisor, who sells the right to use a business idea in a particular location. Which of the following best describes the industry she operates in? 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. The management regulation is not an advantage of franchising. Portica knows the customers of her hat shop by name and knows each of their preferences. 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. Business students at universities can work together to provide management counseling to small businesses in their community. What is the name of that program? Franchisors do not have to renew an agreement at the end of the franchise term. The franchisor says it has the power to control which suppliers the franchisees use due to implied powers in the franchise agreement. Decreased profits are considered one of the main disadvantages of franchising. Richard has a motorcycle and ATV store. ii. According to the SBA, in 2012 women were 51 percent of the U.S. population, and owned at least ___ percent of all small businesses. Which is the most commonly used measure in media planning. d. Consumers are assured of uniform product quality. Provides initial support, such as training, financing, and operational, and management assistance, to franchisees . As many franchises your business have, it’s you, the boss. Enables the franchiser to expand his/her business quickly by receiving ongoing royalties . B) It is a low-risk, low-cost entry strategy. the franchisor still maintains a great deal of control. Small businesses have an advantage over large businesses in all of the following areas except, Jimmy and Henry are considering opening a smoke shop. 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. 6) Which of the following is not a potential advantage of franchising for the franchisee? Issuu is a digital publishing platform that makes it simple to publish magazines, catalogs, newspapers, books, and more online. a. Franchisors gain distribution without the high cost of constructing and operating their own outlets. What is the name of the business agreement Henry would sign? 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. * 2. From a managerial point of view, franchising provides other advantages as well. George Rose/Contributor/Getty Images News. Samantha would like to get a small business loan from the SBA. Franchising is not without its challenges. C) national advertising exposure and financial assistance. A franchise is a joint venture between: A franchisee, who buys the right from a franchisor to copy a business format. The appeal of a business format franchise is understandable. Which of the following is NOT an advantage to franchising? 1. Investment in Franchising . Which of the following statements most accurately describes the success rate of franchises? c. Franchisees can benefit from the business experience of others. Buying power. The process of selecting one or more market segments to enter is called ________. A) lack of control B) workload C) competition D) brand recognition E) royalty fees. The franchise agreement usually includes restrictions on how you can run the 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. 1. Eight disadvantages of franchising. A) Intrapreneurship B) Partnership C) Spin-offs D) Franchising. * 5. Which of the following agencies will most likely arbitrate this dispute? What is the idea of the Price value proposition? Which of the following is NOT an advantage of franchising? 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. 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. For the franchisee, there are no start-up expenses. Darrel's Donuts has been operating quite successfully for two years. High risk in overseas expansion c. Little control over marketing d. Creation of a monopoly Answer: c. Little control over marketing. 4. It is appealing to become your own boss and run a business under a popular brand, right? a. Franchisor has more capital to use for advertising b. Disadvantages of franchising to Franchisor. An attractive idea must be developed into a ________. A product franchise is a franchising agreement where manufacturers allow retailers to distribute products and use names and trademarks. Advertising Programs. Which of the following would not be a good reason to start a small business? 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. 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. Darrel is considering expanding the business by franchising. Which is NOT an advantage of the franchisor in franchising? They have heard that the disadvantages of small businesses include all of the following except. b. Although the franchisor receives a small percentage of the revenues still the new franchise must share its profits. Milkshake Lending Company is a small privately owned firm providing venture capital to small businesses. Franchising is not without its challenges. That is not to say that setting up a franchise is not worth consideration. Anastasia has started a dry cleaning business but is having difficulties with various aspects of organizing and operating the business. There are approximately ___ businesses in the United States. 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. Increasing Brand Equity. Which of the following is NOT a typical supply chain member? Advantages and Disadvantages of Franchising Advantages to Franchisors. When a firm allows others to use a business system in exchange for compensation, the relationship is known as which of the following? In the United States, ___ account(s) for 97.5 percent of all identified exporters and produce(s) 31 percent of export value. Following ways capitalize on the business he would like to open an agreement at the level... Together to provide management counseling to small firms because he knows that small.. S unpublished book 2 renew an agreement for a specific period ranging between five and ten years 's channel directly. Through franchise systems same market can ensure that the new stores are operated according to his own which of the following is not an advantage of franchising. Management assistance, to franchisees them compile a business format include all of the is! 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