International Trade

What is a common advantage of franchising for the franchisee?

• Total control over brand image

• Full legal responsibility

• Access to an established business model

• Unlimited market expansion

A disadvantage of franchising for the franchisor is:

• Increased brand recognition

• Risk of brand inconsistency

• Higher start-up costs

• Fewer revenue streams

Which of the following is a key legal issue in franchising?

• Tax rate variations

• Recruitment strategies

• Intellectual property rights

• Seasonal sales dips

One major risk for the franchisee is:

• Too much creative freedom

• Paying ongoing royalties

• Owning too many outlets

• Lack of customer base

What does the term “franchise fee” refer to?

• Monthly rent

• Initial payment to operate

• Import tax for goods

• Commission for product sales

A franchise agreement usually includes all EXCEPT:

• Duration of the contract

• Terms of training

• Product innovation rules

• Personal financial statements

Which of the following methods is considered the safest for the exporter?

• Open account

• Consignment

• Letter of credit

• Cash on delivery

What does “FOB” stand for in international shipping?

• Full Order Bill

• Freight On Balance

• Free On Board

• Final Official Booking

Exporters prefer prepayment because:

• It guarantees immediate profit

• It reduces delivery costs

• It eliminates credit risk

• In increases customer loyalty

When dealing with international clients, it’s important to:

• Use only informal language

• Avoid written contracts

• Understand cultural differences

• Skip documentation to speed up the deal