Franchising Quiz

What is a franchisee?

• A consultant for franchise businesses

• An employee of the franchisor

• A small business owner operating a franchise

• A person who grants licenses to others

What does a franchisor do?

• Operates the franchise outlets

• Grants licenses to third parties

• Manages the day-to-day operations

• Provides funding for franchisees

What is a franchise agreement?

• A verbal agreement between parties

• A marketing strategy for franchises

• A financial report of the franchise

• A legally binding document outlining terms

Why is franchising compared to a marriage?

• Both are temporary arrangements

• Both need commitment and communication

• Both involve legal contracts

• Both require financial investment

What is one responsibility of a franchisor?

• To operate the franchise location

• To manage the franchisee's finances

• To provide training and support

• To hire employees for the franchisee

What is one advantage of franchising?

• Lower initial investment than starting a business

• No need for a business plan

• Access to established brand recognition

• Complete independence from the franchisor

What is a disadvantage of franchising?

• Limited control over business operations

• Guaranteed profits

• No support from the franchisor

• High potential for failure

What does the term 'dependent on each other' imply in franchising?

• Franchisors have no influence over franchisees

• Franchisees can operate independently

• Franchisees must pay royalties to the franchisor

• Franchisors and franchisees rely on each other for success

What is a key factor for success in franchising?

• Operating without a franchise agreement

• Strong communication between franchisor and franchisee

• Focusing solely on local marketing

• Ignoring the franchisor's guidelines

Who is Fred De Luca?

• An author on franchising

• A franchisor consultant

• The founder of Subway

• A famous franchisee