311.Global franchising offers: A.Few opportunities for American investors. B.Opportunities for large franchise

Question : 311.Global franchising offers: A.Few opportunities for American investors. B.Opportunities for large franchise : 1183939



311.Global franchising offers: 

A.Few opportunities for American investors.


B.Opportunities for large franchise systems, but not small ones.


C.Opportunities for both large and small franchises.


D.American firms the opportunity to market goods overseas without any need to adjust for cultural differences.





312.Opening and operating a franchise in a different country: 

A.Is illegal according to the Clayton Antitrust Act.


B.Is no different than setting up a franchise in the domestic market.


C.May require the owner to adapt to social and cultural differences.


D.Is much less risky than owning a domestically based franchise.





313.Franchisors may send reverse royalties to franchisees who: 

A.Have not yet created their own web site.


B.Feel their sales have been hurt by the franchisor's Internet sales.


C.Are using e-commerce to expand their sales territory.


D.Desire to streamline their communication with employees, customers, and vendors.





314._____________ is by far the most popular target for American franchisors seeking to establish franchises in other countries. 





C.Great Britain







315.Franchised businesses are successful (both domestically and internationally) because: 

A.They require very little start-up revenue.


B.People prefer the owners and employees of franchised businesses.


C.Laws require franchisors to provide the same level of service to franchisees.


D.Customers like the predictability of the product and/or service.





316.An evaluation of franchising would conclude that this type of arrangement: 

A.Has become the dominant form of business organization in the United States because it has many advantages and almost no disadvantages.


B.Appeals to people who want to own a business, but are not comfortable starting a company from scratch.


C.Has a much higher risk of failure than independent companies.


D.Has little chance of success outside the United States because many foreign countries do not allow such arrangements.

An advantage of franchising is that it allows franchisees to own their business while taking advantage of an established name and product.




317.Which of the following statements best summarizes the experience of American franchisors in foreign countries? 

A.Very few American franchisors of any size have had success in international markets.


B.Large franchisors have had success in other nations, but newer and smaller franchisors have lacked the financial strength and reputation to succeed in global markets.


C.The only nations in which American franchisors have achieved any success are Great Britain and Mexico.


D.Both large and small franchises have found success in foreign countries by providing convenience and a predictable level of service and quality.

Literally hundreds of U.S.-based franchisors have outlets in foreign countries. Even new and relatively small franchisors are finding success in other countries. The key to international success in franchising is the same as the key to success in the United States: providing the customer with convenience and a predictable level of service and quality.




318.One important consideration when prospecting for a good franchise business is: 

A.The saturation rate of the franchise. The more saturation the better.


B.The market potential for the product or service, at the prices you need to charge.


C.The population level of the area where you will operate. Large populations are too overwhelming, often needlessly increasing demand.


D.A limited disclosure statement, and being mindful that any disclosure statement may limit your success.

The market potential is very important. Your goal should be to establish yourself with a franchisor whose product or service has increasing demand in the area where you will operate. You do not want your idea to be saturated in your territory. You will want the franchisor to offer full disclosure of rules, policies, and procedures.




319.Which of the following statements about buying a franchise is most accurate? 

A.One of the advantages of buying a franchise is that franchisors are so closely regulated that there is virtually no chance for scams to succeed.


B.Before purchasing a franchise, the buyer should carefully evaluate the franchise, the franchisor, his or her own situation, and the nature of the market.


C.Franchise agreements are simple to evaluate, since federal law requires that all such agreements must be written in plain English with all fees and terms clearly explained.


D.Buying a franchise is the simplest and least expensive way to set up a business, since the franchisor has already worked out all of the details for setting up and running the business.

This question is based on information in Figure 5.9. The figure provides a lengthy checklist of questions for evaluating a franchise, including questions about the franchise itself, the franchisor, the franchisee, and the market.




320.Which of the following statements about operating a U.S.-based franchise in a foreign country is most accurate? 

A.U.S.-based franchises are most likely to succeed in a foreign market if they use the same strategies and procedures used by franchises in the United States.


B.There are limited opportunities for U.S.-based franchises to open in foreign countries because, aside from Canada, Mexico, and a small number of European countries, most foreign nations do not allow American-owned franchises to operate within their borders.


C.The operating costs for franchises in foreign countries may be fairly high, but chances for success are quite good, because competition is likely to be less intense and the customer base in many foreign countries is expanding.


D.It is difficult for U.S.-based franchises to succeed in most foreign countries because the low incomes of most households in these countries result in weak demand.

Franchises in foreign countries can be more expensive, but this is usually counterbalanced by less competition and a rapidly expanding consumer base.





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