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Exam 14: Franchising and Purchasing an Existing Business

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Question 21

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A business ________ specializes in selling businesses.

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Question 22

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A franchisor makes money by

A) selling the franchise.
B) collecting a percentage of sales.
C) providing specific training.
D) all of these.

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Question 23

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When buying an existing business, there is a greater premium attached to the business than if the business is started from scratch.

Which of the following is the basic contract generated by a franchisor for all franchises?

The Uniform Franchise Offering Circular has ________ specified items.

Businesses that specialize in selling businesses are known as

A disadvantage of buying an existing business is that operating processes and policies have already been established.This means that it is a riskier purchase than the purchase of a franchise.

One advantage of buying an existing business instead of a franchise is that an existing business already has an established cash flow.

The typical time frame that a franchise agreement lasts is ________ years.

Yummy Bacon Inc.manufactures and sells bacon and sausages in the country of Valkyris.To expand its business, it invites interested entrepreneurs to open its branches in a few more cities.It also assures the prospective entrepreneurs that it will provide specific training in marketing and operational methods to all staffs in the new branches.In this scenario, Yummy Bacon Inc.is a ________.

An individual looking to buy a franchise should identify a franchisor that is the best potential match in

When you buy a franchise, you are buying

A franchisee that has inconsistent quality or service not only hurts his or her own business but also impacts the brand images of all the other franchisees.

When buying a franchise, what issues should a potential franchisee examine?

A franchisor typically provides ________ to develop performance management programs, quality control methods, forecasting, and purchasing of equipment, which are very valuable services that act as guidelines rather than mandates in deciding on a franchise.

Describe the ways in which a franchisor and a franchisee help each other.

An entrepreneur is a franchisee.

Identify an accurate statement about franchising.

The ________ pays a fee to obtain a franchise from the franchisor.

Why would an entrepreneur buy an existing business?