Chapter 12 Franchising

What is the purpose of a franchise model

• to maintain a small but loyal customer base

• to only offer products in one market

• to increase the customer base of a brand

• to offer one product in each market

How can the franchisor create a common platform

• by controlling the employee selection at each location

• by controlling the management of the franchise

• by controlling the business operations at each location

• by controlling the products supplied at each location

Who is responsible for supplying the business processes and systems at the franchised location

• franchisor

• franchisee

• franchise lawyer

• franchise consultant

Who is responsible for hiring at a franchised location

• franchisor

• franchisee

• franchise lawyer

• franchise consultant

In what type of franchise does a franchisor not enforce a specific business format that must be followed by the franchisee

• product franchise

• manufacturing franchise

• management franchise

• business format franchise

______ are the fees paid to the franchisor as a percentage of gross sales

• royalties

• commission

• upfront fees

• support costs

The business format franchise represents the highest percentage of the total retail sales across all franchised businesses

• True

• False

What type of franchise is popular in the soft drink industry

• product franchise

• manufacturing frachise

• management franchise

• business format franchise

________ is the least common type of franchise

• product franchise

• manufacturing franchise

• management franchise

• business format franchise

__________ is the most common type of franchise

• product franchise

• manufacturing frachise

• management franchise

• business format franchise