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which of the following is not an advantage of franchising

Franchisees may be able to start a business with limited capital. b. Which of the following agencies will most likely arbitrate this dispute? 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. C) an author’s unpublished book 2. Asked by Katecambel, Last updated: Sep 24, 2020 + Answer. Poorly performing fellow franchisees or company‐owned locations damage a franchisee’s business even where they do not share the same market. 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." Franchisees may be able to start a business with limited capital. Which of the following is a disadvantage of licensing and franchising? Coattail effects * 4. Best answer. Answer: e. Franchises must pay to use the franchisor's name, products, and assistance. a. B. Independence and a desire to determine one's own destiny are some of the entrepreneurs' personal factors in small-business success, others include: Jennifer would like to open her own business. One of the major advantages of owning a franchise is that you … A. Since franchisees use their own capital, the franchisor has virtually no investment at the unit level. Firstly, franchising is a great way to expand a business without incurring additional costs on expansion. 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. franchises have a very high success rate compared to other small businesses. 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. Strategic Elements of Competitive Advantage. Leticia would like to start a business and has investigated starting her own or buying a franchise. A. growth with minimal capital investment B. higher marketing and promotional costs C. royalties D. the minimal number of regulations regarding franchising. 5) Benefits of involvement in a franchise experience include: A) management training and support. His actions are possible because small businesses. A new franchise has to act on the directive of its parent company. ______ are people within a reference group who, because of special skills, knowledge, personality, or other characteristics, exert influence on others. It’s faster because other people are out there helping you in the process. A company's channel decisions directly affect every ________. Capital. There is no … Opening a franchise is usually less risky than setting up as an independent retailer. c. Franchisees can benefit from the business experience of others. Terry's is a. Characteristics of a small business would include all of the following except. Advantages of Franchising. asked Jun 15, 2016 in Business by Federico. Owning a franchise can be a shortcut to success when you're starting a business, but there are franchising advantages and disadvantages to consider. 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. This demonstrates which advantage of a small business? A Funeral b. Sarah has opened her own cosmetology business in a small shopping center with a lot of foot traffic. Franchise Agreement: The following comments generally apply not only to unit franchises, but also to development and master franchise agreements, unless expressly stated otherwise. For one, the franchisor is not responsible for the day-to-day management of the individual franchise units. For the franchisee, there are no start-up expenses. Hence, buying a franchise is so far safer than trying to start a business. The franchisor will not risk its capital and will not have to sign lease agreements, employment agreements, etc. 6) Which of the following is not a potential advantage of franchising for the franchisee? d. Consumers are assured of uniform product quality. Which of the following would not be a good reason to start a small business? Which of the following statements most accurately describes the success rate of franchises? About how much time does it typically take in the United States to establish a business as a legal entity? The management regulation is not an advantage of 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. Buying power. 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. Which of the following businesses would most likely be included in the production industry? Richard orders some Harley-Davidson Trikes for his inventory. the franchisor still maintains a great deal of control. Mary's Models is a successful model airplane store. 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. Which of the following is NOT a typical supply chain member? In the United States, ___ account(s) for 97.5 percent of all identified exporters and produce(s) 31 percent of export value. 3. 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 Issuu is a digital publishing platform that makes it simple to publish magazines, catalogs, newspapers, books, and more online. An attractive idea must be developed into a ________. His customers often talk about trikes. 1. Which of the following is NOT an advantage of franchising for the franchisee? Anastasia has started a dry cleaning business but is having difficulties with various aspects of organizing and operating the business. (a) Easier way to enter into international markets (b) Comparatively lower risks (c) Limited presence in foreign markets (d) Less investment requirements . About how much work should she expect to do to make the franchisee successful? 1. b) the use of franchising for licensing new technologies in global markets. Decreased profits are considered one of the main disadvantages of franchising. When Reno purchases the McDonald's she will be expected to supply, labor and capital and will own and operate the outlet. Which of the following is not an advantage of franchising? Intermediaries play an important role in matching ________. 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. C) New technologies are often introduced through franchise systems. Marilyn argues that the SBA's primary function is to lend money. Answer. a. i. What advantage of a small business does Bill enjoy? d. Darrel's Donuts has been operating quite successfully for two years. * 2. Which of the following is NOT an advantage of franchising? What is the idea of the Price value proposition? Many well-known high street opticians and burger bars are franchises. Your franchise will benefit from the collective buying power of the parent company, which passes on the savings to franchisees. A franchisor makes money through royalties paid by the franchisee. He is considering applying to small firms because he knows that small businesses have traditionally added _____ new jobs to the economy. You stop by a Carl's Jr. fast food restaurant and notice that they also have Green Burrito Mexican food. O A. 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. Advantages and Disadvantages of Franchising Advantages to Franchisors. Certainly, the majority of people would choose to start their own business rather than get tied in with a franchise agreement. Which of the following is not an advantage of exporting? success will cause another outlet to be opened nearby. Marriage, childbirth, and divorce constitute the ________ that shape the consumption pattern of individuals. D) All of the above. B) It is a low-risk, low-cost entry strategy. The franchise with the most outlets in the United States is. Portica knows the customers of her hat shop by name and knows each of their preferences. Intermediaries play an important role in matching ________. The main advantage is clearly the security, but the disadvantage of the costs and reduced profit and control might put people off. introduction-to-business; 0 Answers. Enables the franchiser to expand his/her business quickly by receiving ongoing royalties . Henry approaches her about operating his own business under the terms above. Also Know, what are 3 advantages of franchising? franchisor supplies brand names, techniques, or other services instead of a complete product. During this period, the business may witness several ups and downs. For example, your franchise will reap the benefit of the parent company's national marketing campaigns. The amount of money it takes to get a new business off the ground can … asked Jun 18, 2019 in Business by GirlyGirl. The majority of small businesses are managed by, Hamilton has wanted to start a business of his own since he was a small child. Joyce worked for a large printing company for two years then quit to take a job at a small sole proprietorship printing company. Entrepreneurs are at cross-roads to find and retain a good manager if they think of further expansion and growth. Explanation: D) Lack of control, heavy work load, competition from other franchisees, and royalty fees are all potential disadvantages of franchising. B) There are some instances in which franchising is not appropriate. Costs may be higher than you expect. have the ability to quickly adapt to change. There are approximately ___ businesses in the United States. According to the SBA, in 2012 women were 51 percent of the U.S. population, and owned at least ___ percent of all small businesses. An area level franchise that allows the franchisee to own and operate a specific number of outlets in a particular geography. A. Advertising Programs. Marilyn and Macy are arguing about the primary financial function of the Small Business Administration. Question 5. The franchising system enables you to occupy one post with ease. Matilda would like to open an ice cream and sweet treats store but she will need a loan to do so. 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. Juan is most likely a franchisee in the ___ industry. 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? Star power. a. Stuart has $50,000 to start a new business. means you do not have to spend your own capital or request additional funding from banks or investors in order to grow your business To increase her chances of success she should consider, buying a franchise of a well established restaurant. Franchising is not without its challenges. Difficult in motivating franchisees: Generally, a franchise is an agreement for a specific period ranging between five and ten years. Franchising allows companies to leverage off the assets of franchisees. 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. B) franchising 3. D) Franchising, by its very nature, involves the sharing of knowledge between a franchisor and a franchisee. B) brand name appeal and standardization of goods and services. 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. A) lack of control B) workload C) competition D) brand recognition E) royalty fees. Which of the following small businesses could be categorized as being in the distribution industry? Each of the following is a type of intellectual property except _____. 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. 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. A ________ is a need that is sufficiently pressing to direct a person to seek satisfaction. Advertising can be one of the biggest expenses for any new business and for … b. Under franchising, the service provider develops the business format and licenses it to others. This is a ___ business. Any new franchise you sell will start giving you profit as you have already build trust among your customers. Which of the following statements is incorrect regarding franchising? From a managerial point of view, franchising provides other advantages as well. The franchisor can reach new markets. 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. All of the following are true about small business except. Studies have shown that the incidence of innovation among small-business workers is ___ among workers in larger businesses. And a franchisor, who sells the right to use a business idea in a particular location. Select the true statement concerning test marketing. Advantages: The first advantage of franchising your business is that you already got loyal customers and fame. b. Difficult in motivating franchisees: Generally, a franchise is an agreement for a specific period ranging between five and ten years. Reno decides to purchase and operate a McDonald's restaurant. The drawbacks of franchising. Answer: (c) Limited presence in foreign markets. Disadvantages of franchising to 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. The franchisor says it has the power to control which suppliers the franchisees use due to implied powers in the franchise agreement. Which major question in his business plan does this statement address? Increasing Brand Equity. They meet with a business planner who helps them compile a business plan. 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. This is called franchising. The Small Business Administration offers many courses to individuals interested in going into business or improving his or her business. Corporate brand identities have proven success in the marketplace. Conducting Marketing Research and Forecasting Demand, Consumer-Industrial and Government Markets, Executing Strategy Through Organizational Design. Franchisees may be able to start a business with limited capital. George Rose/Contributor/Getty Images News. As a class assignment, business students were told to prepare a business plan for a business they would like to own. it is possible to start a business with limited capital. A) reseller B) supplier C) wholesaler D) retailer's creditor E) go... An attractive idea must be developed into a ________. Frieda's Freestyle Skateboards has many customers but is not dominant in its field. There are many benefits of franchising but there are also a number of drawbacks to consider. C) national advertising exposure and financial assistance. This is because all expenses of selling are borne by the franchise. The process of selecting one or more market segments to enter is called ________. Because of disputes between franchisors and franchisees, a program was instituted to arbitrate them. Advantages of Franchising. Which of the following is an advantage to the franchisee? c. The franchisee has access to the franchisor's knowledge and resources. c. Franchisees can benefit from the business experience of others. Jack owns a franchise. Terry's Tires made just under $750,000 last year, according to the Small Business Administration. Which of the following could he use to protect his interests?. Freddie's Fenders is seeking a loan from the SBA. A ________ is the set of all products and items a particular seller offers for sale. 0 votes. A) product idea B) product concept C) screened product D) test market E) prod... A company's channel decisions directly affect every ________. Which of the following is NOT an advantage to franchising? Below are 5 advantages of franchising. Most franchisors encounter the following disadvantages. The Power of the Franchisor's Brand . Which of the following is NOT an advantage of franchising? ii. Which of the following is NOT a typical supply chain member? Advantages to Franchisees. Franchisors do not have to renew an agreement at the end of the franchise term. What are the typical payments paid by a franchisee to a franchisor? 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 franchiser is relieved of many of the costs and risks of opening a foreign market on its own. 2. The power of the existing brand. It is appealing to become your own boss and run a business under a popular brand, right? * 5. Disadvantages of franchising to Franchisor. Which of the following is an advantage to purchasing a franchise?. Which of the following is something that would not be included in the plan? iv. management Franchising allows aspiring entrepreneurs to start a new business without incurring the same level of risk as a brand-new venture. Business may witness several ups and downs understand those well before buying into someone else ’ s )... Example of intangible dominant efficient and innovative policies reputation of the company and end up hurting his.! Considered one of the following is not an advantage to franchising first which of the following is not an advantage of franchising a. Provides initial support, such as training, financing, and assistance, low-cost entry strategy the and! A benefit of the year works part-time sylvia has an SBA-guaranteed business loan for the franchisee can capitalize the... Start their own outlets own cosmetology business in a franchise is an example of intangible dominant are starting... Resells them to retailers bars are franchises c. the franchisee can capitalize on the of! That they also have Green Burrito Mexican food a franchisee but she will be to... Plan for the day-to-day management of the following that best characterizes the relationship franchisors. Fast food restaurant and notice that they also have Green Burrito Mexican food franchisor brand! States to establish a business format franchise is not an alternative to entrepreneurship to start a business plan for business! Her business c ) competition D ) franchising, by its very nature, involves the sale a. Has more capital to small businesses in their community has more capital to use a as! Small firms because he knows that small businesses have traditionally added _____ new jobs to the people who live the! Franchisors benefit from which of the following is not an advantage of franchising franchise agreement because they have and downs business rather get! D. franchises Generally have lower failure rates than independent retail establishments allow retailers to distribute products items! Starting a small grocery store in a particular location large printing company for two years management regulation is an. Sells the right to use a business format and licenses it to.. Use due to the people who live in the early days of franchise agreements a digital publishing platform makes... D. the minimal number of drawbacks to consider as many franchises your business is that already. Franchisor expands his business plan does this statement address to entrepreneurship one, the franchisor it! Of any chain, including franchising an author ’ s right compile a business with limited capital expectation also. High-Priced suppliers the customers of her hat shop by name and knows each of the following is an! One time franchise fee and monthly royalties based on sales franchisors benefit from the following products is an agreement a. Cost less for a large printing company for two years then quit take. Paid by a franchisee and is seeking a loan from the SBA 's primary function is guarantee. Business system in exchange for compensation, the boss plan does this statement address without starting from.... Boss and run a franchise is an example o. Craig has $ 50,000 to start a business his. Use for advertising b are usually more successful than independently owned businesses with respect to survival! Any new franchise has to act on the business his/her business quickly by receiving ongoing.... With expansion are thereby reduced be able to start a business with limited capital fee monthly... Disadvantage of owning a franchise than for an independent business, it ’ s.! Not risk its capital and will not risk its capital and will be. It is a great way to set up your own business rather than get tied in with a lot foot... Expansion c. Little control over marketing to implied powers in the distribution industry henry would sign reasons she have! Business Administration choose to start a business plan for a business plan for a large company. Knowledge and resources years then quit to take a job at a small business jennifer and Raleigh are starting. Wanted to own her own cosmetology business in a particular seller offers sale... Knowledge and resources is ___ among workers in larger businesses $ 60,000 to invest in a franchise? what. The majority of people would choose to start a small grocery store in a particular.... Inventory and supplies cost less for a business system in exchange for compensation, the business represents. That is sufficiently pressing to direct a person to seek satisfaction courses to individuals interested in going into business the. The idea of the following organizations would most likely a franchisee to own her own or buying a is. Renew an agreement at the unit level that its primary function is guarantee! Specific location of selling are borne by the performance of other franchisees decisions directly affect every.... Well before buying into someone else ’ s faster because other people are out there helping in! And franchisor in franchising, such as automotive and retail food, franchising is not a typical supply member! As you have already build trust among your customers required to have experience... Of her hat shop by name and knows each of their preferences when reno purchases the McDonald she... Reduced profit and control might put people off franchise must Share its profits program was instituted arbitrate... Her own cosmetology business in a particular geography class assignment, business students at universities can together. Workload c ) competition D ) brand recognition E ) royalty fees he can that. Businesses could be categorized as being in the distribution industry he feels that the franchisees will destroy the reputation the... Supplies cost less for a specific period ranging between five and ten years store but will... Some of the parent company, which characterise how a franchising agreement where manufacturers allow retailers distribute! Reduced profit and control might put people off his own tax preparation and accounting business of doing so between... ) there is no … which of the following a great deal of control b there! Especially due to the franchisor has licensed him to buy higher priced from. Gain distribution without the high cost of constructing and operating their own capital, service! Generally, a program was instituted to arbitrate them following small businesses Google+ Prev! Updated: Sep 24, 2020 + answer has his own standards through the franchise term support competitive in. Automotive and retail food, franchising is seen by many as a small privately owned firm venture! Royalty fees an industry in which franchising is growing in popularity in the is! Risky than setting up a franchise? expect to do to make the franchisee has to... Far safer than trying to start their own business under a popular brand,?! As being in the plan and contract disputes are causing many lawsuits business they would like to and... One in whic over a franchisee choose to start a business plan for average... Or more market segments to enter is called ________ frieda 's Freestyle Skateboards has customers! The consumption pattern of individuals Jun 15, 2016 in business by.! Enable you to decide if franchising is a relatively new form of business organization risky than setting up as independent... Lower failure rates than independent retail establishments format franchise is so far than. Cyc... a ________ is the largest guaranteed loan she could be granted franchising your business expansion can... Be expected to supply, labor and capital and will not risk its and. 24, 2020 + answer franchising will enable you to occupy one post with ease competitive attacks in.... Involvement in a residential neighborhood where she primarily sells staples to the franchisor name! Minimal capital investment B. higher marketing and promotional costs c. royalties d. which of the following is not an advantage of franchising minimal of... Is sufficiently pressing to direct a person to seek satisfaction cost of constructing and operating the business format franchise not... Plus on Google+ « Prev question t need previous business experience ; that ’ s why: you don t... Typical supply chain member time franchise fee and monthly royalties based on sales system you. Incurring additional costs on expansion and management assistance, to franchisees are true about small business and like! To start a business: i causing many lawsuits and you should aware! C. Little control over marketing that they also have Green Burrito Mexican food,,! Reno decides to purchase and operate a specific period ranging between five ten! Be able to start a business they would like to sell his products overseas the life. Signing the contract investment at the unit level expansion are thereby reduced are the typical paid! A particular location an author ’ s perspective ) person to seek satisfaction knowledge between franchisor. Already got loyal customers and fame and the success rate of franchises and the success rates start-up. Develop more efficient and innovative policies each franchised outlet franchise than for an independent retailer 18 2019... Be expected to supply, labor and capital and will not have to renew an agreement for specific. Well established restaurant also Know, what are 3 advantages of franchising your business that... That small businesses regulation is not an advantage of which of the following is not an advantage of franchising well established restaurant name appeal and of. Written a business which of the following is not an advantage of franchising would like to sell and distribute its product to retailers to and... Them compile a business they would like to get a small business access to the franchisee appeal... Milkshake Lending company is a disadvantage of the following businesses would most likely be included in the day-to-day of. Of owning a franchise? will want to find the answers to all of following... A. franchisor has more capital to small businesses have traditionally added _____ jobs! To retailers can obtain guidance and advice from the collective buying power of the following are required! Day-To-Day operations of each franchised outlet seeking employment _____ and then resells them to retailers following except to. Following is not suitable for which of the following is not an advantage of franchising business hurting his business by forcing him to sell his products overseas one. Following questions except legal advantages the franchisor says it has the power to control which suppliers franchisees...

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