Franchising Knowledge Long Quiz

What is the first step in determining if a business is ready for franchising?

• Drafting a franchise agreement

• Assessing profitability

• Evaluating the business model

• Preparing legal disclosures

Which of the following is essential for a business to be considered franchisable?

• It must be in the concept stage

• It must have proven profitability

• It must only operate in one location

• It must focus on luxury products

What does flexibility in a franchise system allow for?

• Complete standardization of products

• Customization to local market needs

• Elimination of promotional efforts

• Uniform pricing strategies

Why is transferability of the business model important for franchising?

• It determines the marketing budget

• It affects how quickly franchisees can learn the business

• It impacts the franchise agreement length

• It influences brand awareness

What does standardization ensure in a franchise system?

• Higher costs for franchisees

• Consistency in product/service offerings

• More complex training requirements

• Less control over local adaptations

What is a prototype in the context of franchising?

• A generic business model

• A successful example of a franchised store

• A theoretical business concept

• A failed business strategy

What is one of the variables that establishes trustworthiness for potential franchisees?

• Size of the organization

• Number of employees

• Length of the lease agreement

• Type of product offered

What is required for management competency in franchising?

• Ability to micromanage franchisees

• Identifying and nurturing entrepreneurial talents

• Focusing solely on company-owned stores

• Reducing the number of franchisees

What is a feasibility examination in franchising?

• Assessing the legal framework only

• Evaluating the business's growth potential

• Conducting market research exclusively

• Ignoring competitor analysis

What is the significance of having multiple operating locations before franchising?

• It increases competition among franchisees

• It serves as a testing ground for franchise success

• It complicates the business model

• It limits market exposure