EST Revision quiz

What is a franchise?

• A type of investment account

• A type of legal contract

• A type of government agency

• A type of sports team

What are the three main types of franchises?

• Automotive, fast food, and retail

• Service, product, and investment

• Business format, product distribution, and management

• Single-unit, multi-unit, and master franchise

What is a franchise agreement?

• A document outlining the terms of the franchise relationship

• A legal document outlining the terms of a loan

• A document outlining the terms of a lease agreement

• A document outlining the terms of an employment contract

What are the benefits of owning a franchise?

• Independence and creative freedom

• Reduced risk and established brand recognition

• Lower costs and greater flexibility

• Control over product development and marketing

What are the drawbacks of owning a franchise?

• High costs and limited flexibility

• Limited support and resources from the franchisor

• High risk and uncertain return on investment

• No access to established brand recognition

What is the franchise fee?

• The fee paid to the franchisor for the right to use the franchise system

• The fee paid to the franchisee for providing training and support

• The fee paid to the government for registering a franchise agreement

• The fee paid to a lawyer for reviewing a franchise agreement

What is the royalty fee?

• The fee paid to the franchisor for marketing and advertising expenses

• The fee paid to the franchisee for providing products or services

• The fee paid to the government for licensing the franchise system

• The fee paid to the franchisor for ongoing use of the franchise system

What is the difference between a franchisee and a franchisor?

• A franchisee is the owner of the franchise unit, while a franchisor is the parent company that grants the franchise rights

• A franchisee is the parent company that grants the franchise rights, while a franchisor is the owner of the franchise unit

• A franchisee is a third-party that handles marketing and advertising, while a franchisor is responsible for product development and support

• A franchisee is responsible for legal compliance, while a franchisor handles operational management

How long does a typical franchise agreement last?

• 1-3 years

• 5-10 years

• 15-20 years

• It varies depending on the franchise system and agreement terms

What is a franchise disclosure document (FDD)?

• A legal document that provides detailed information about the franchisor and franchise system

• A marketing brochure used to promote the franchise to potential franchisees

• A financial statement outlining the profitability of the franchise system

• A training manual used to educate franchisees on the operation of the franchise system