The process of selecting one or more market segments to enter is called ________. Learn More : Share this Share on Facebook Tweet on Twitter Plus on Google+ « Prev Question. He has misjudged, In order to operate a successful small business, the entrepreneur should be most concerned with, Jeff Katz, the founder of Orbitz,Inc., when speaking about new businesses recently said, "A flat checkbook is the mother of invention." Franchising allows companies to leverage off the assets of franchisees. Automobile dealerships and ___ were the primary uses for franchises in the early days of franchise agreements. it is possible to start a business with limited capital. When problems arise, the franchisee can obtain guidance and advice from the franchiser. He wants the business to succeed. 1. As well as the initial costs of buying the franchise, you pay continuing management service fees and you may have to agree to buy products from the franchisor. d. Consumers are assured of uniform product quality. FAQs About Franchising FAQs About Franchising If you've ever wondered how to start a franchise, where to find franchisees, how the franchisor/ franchisee relationship should work, or what to ask before purchasing a franchise, you've come to the right place. 61) Which of the following is an advantage of franchising to the franchisor? Franchising involves: a) the transfer of patented information and trademarks, information and know-how as well as information needed to sell a product or service. b. Understanding the advantages and disadvantages of franchising will enable you to decide if franchising is a suitable option for your business expansion. B. A) product idea B) product concept C) screened product D) test market E) prod... A company's channel decisions directly affect every ________. Any new franchise you sell will start giving you profit as you have already build trust among your customers. He has read about the success rates of franchises and the success rates of start-up businesses. If you've ever wondered how to start a franchise, where to find franchisees, how the franchisor/ franchisee relationship should work, or what to ask before purchasing a franchise, you've come to the right place. A) lack of control B) workload C) competition D) brand recognition E) royalty fees. The franchise agreement usually includes restrictions on how you can run the business. asked Jun 15, 2016 in Business by Federico. Explanation: D) Lack of control, heavy work load, competition from other franchisees, and royalty fees are all potential disadvantages of franchising. The main advantage is clearly the security, but the disadvantage of the costs and reduced profit and control might put people off. A) It is easier to maintain control over a franchisee. The business that represents 99.7 percent of all employers in the United States is a. The Power of the Franchisor's Brand . What is the name of that program? A product franchise is a franchising agreement where manufacturers allow retailers to distribute products and use names and trademarks. Franchising; Contract manufacturing; Joint venture Answer: (c) Contract manufacturing; Question 3: When two or more firms come together to create a new business entity that is legally separate and distinct from its parents it is known as. Thus, inventory and supplies cost less for a franchise than for an independent company. Best answer. You can switch careers easily when changing industries, which is now commonplace for most entrepreneurs. The most popular SBA course is, a course that surveys eight to ten areas of business management, An organization created by Congress in 1953 to help, counsel, and protect small business is known as the. introduction-to-business; 0 Answers. An area level franchise that allows the franchisee to own and operate a specific number of outlets in a particular geography. Since franchisees use their own capital, the franchisor has virtually no investment at the unit level. Which of the following is a disadvantage of licensing and franchising? b. A) In some industries, such as automotive and retail food, franchising is a dominant form of business ownership and growth. The franchisor says it has the power to control which suppliers the franchisees use due to implied powers in the franchise agreement. Your franchise will benefit from the collective buying power of the parent company, which passes on the savings to franchisees. A franchisor makes money through royalties paid by the franchisee. Portica knows the customers of her hat shop by name and knows each of their preferences. a. Marriage, childbirth, and divorce constitute the ________ that shape the consumption pattern of individuals. franchisor supplies brand names, techniques, or other services instead of a complete product. It’s faster because other people are out there helping you in the process. Brenda has a small grocery store in a residential neighborhood where she primarily sells staples to the people who live in the area. Capital. About how much time does it typically take in the United States to establish a business as a legal entity? A) psychological life cyc... A ________ is a need that is sufficiently pressing to direct a person to seek satisfaction. a. Franchisors gain distribution without the high cost of constructing and operating their own outlets. Where is Ellis most likely to go for advice and guidance about running the outlet? Following are some of the advantages of franchising a business: i. How many years will she have to repay the loan? 5) Benefits of involvement in a franchise experience include: A) management training and support. A. When a firm allows others to use a business system in exchange for compensation, the relationship is known as which of the following? The appeal of a business format franchise is understandable. Which of the following is NOT a disadvantage of franchising? c. Franchisees can benefit from the business experience of others. A franchise is a joint venture between: A franchisee, who buys the right from a franchisor to copy a business format. Marilyn and Macy are arguing about the primary financial function of the Small Business Administration. a. C)Not providing detailed operational information until 10 days before signing the contract. Strategic Elements of Competitive Advantage. Following are the 15 Advantages and Disadvantages of Franchising your Business (franchisor’s perspective). Advantages of Franchising. Darrel's Donuts has been operating quite successfully for two years. Eight disadvantages of franchising. d. Which of the following organizations can assist him? This is because all expenses of selling are borne by the franchise. What are the typical payments paid by a franchisee to a franchisor? Freddie's Fenders is seeking a loan from the SBA. Buying power. Which of the following is not an alternative to entrepreneurship? Advantages of Franchising. Franchisees may be able to start a business with limited capital. This question is part of Forms of Business Organisation. Which of the following best describes the industry she operates in? Below, we answer the most common questions prospective franchisees and franchisors have asked us over the years. What is the name of the business agreement Henry would sign? d. Franchises generally have lower failure rates than independent retail establishments. Brent and Wendy plan to open a new business. The following are not so many disadvantages but limitations, which characterise how a franchising system works. You stop by a Carl's Jr. fast food restaurant and notice that they also have Green Burrito Mexican food. And a franchisor, who sells the right to use a business idea in a particular location. Following are the 15 Advantages and Disadvantages of Franchising your Business (franchisor’s perspective). A Funeral b. Bill has his own tax preparation and accounting business. (ii) It reduces chances for failure. Samantha would like to get a small business loan from the SBA. Which of the following is NOT an advantage of a franchise? There is no … Which of the following is NOT a typical supply chain member? Matilda would like to open an ice cream and sweet treats store but she will need a loan to do so. The power of the existing brand. d. Franchises generally have lower failure rates than independent retail establishments. One of the major advantages of owning a franchise is that you … This is not what happens in franchising. B)An offer of direct financing of a specific element of the franchise package. The franchisor can reach new markets. asked Jun 18, 2019 in Business by GirlyGirl. a. Franchisors gain distribution without the high cost of constructing and operating their own outlets. But under specific circumstances like transparency, favourable legal conditions, financial means and proper market research, franchising can be a vehicle of success for both franchisor and franchisee. This is a ___ business. Darrel is considering expanding the business by franchising. she will work very hard putting in long hours about six days a week, The SBA assists small-business owners entering the world markets by doing all of the following except, offering long term loans to US business owners. c. The franchisee has access to the franchisor's knowledge and resources. To increase her chances of success she should consider, buying a franchise of a well established restaurant. a. The most obvious benefit of franchising to a prospective franchisor is the ability to expand a business by utilising the manpower and capital of others. Advertising Programs. Option E is correct. If the franchise is already a household name then this is one of the … This is called franchising. Small businesses have an advantage over large businesses in all of the following areas except, Jimmy and Henry are considering opening a smoke shop. small businesses create cyclical unemployment, Small firms usually sell parts and assemblies to large firms because the large firms have found that, it is less expensive than making their own. means you do not have to spend your own capital or request additional funding from banks or investors in order to grow your business They have heard that the disadvantages of small businesses include all of the following except. Which of the following is NOT an advantage of franchising? This is an example o. Craig has $60,000 to invest in a new small business. A) reseller B) supplier C) wholesaler D) retailer's creditor E) go... An attractive idea must be developed into a ________. Most franchisors encounter the following disadvantages. Godfrey has just graduated from business school and is seeking employment. Leticia would like to start a business and has investigated starting her own or buying a franchise. Increasing Brand Equity. the ability to build personal relationships with the owners and other employees. C) an author’s unpublished book 2. Which of the following is not an advantage of exporting? It’s Less Expensive to Start. Franchisees may be able to start a business with limited capital. D) Franchising, by its very nature, involves the sharing of knowledge between a franchisor and a franchisee. The advantages and disadvantages vary depending on: If You Want to Franchise Your Business – So‚ if you are a successful business owner and you want to expand then‚ naturally‚ franchising is an option that you will want to consider. Any new franchise you sell will start giving you profit as you have already build trust among your customers. Coattail effects * 4. What advantage of a small business does Bill enjoy? A. ADVERTISEMENTS: iii. b) the use of franchising for licensing new technologies in global markets. A wholesaler purchases products in quantity from _____ and then resells them to retailers. success will cause another outlet to be opened nearby. Which of the following statements most accurately describes the success rate of franchises? What is the largest guaranteed loan she could be granted? The management regulation is not an advantage of franchising. Reno decides to purchase and operate a McDonald's restaurant. The majority of small businesses are managed by, Hamilton has wanted to start a business of his own since he was a small child. answered Jun 15, 2016 by DaenaDanes . A potential franchisor is concerned that the franchisees will destroy the reputation of the company and end up hurting his business. Owning a franchise can be a shortcut to success when you're starting a business, but there are franchising advantages and disadvantages to consider. This demonstrates which advantage of a small business? The franchisor pays for advertising C. The franchisor does not manage these new outlets D. Banks are often willing to lend to franchisees due to relatively low risk. All of the following are typical characteristics of cross-border contractual relationships… Who is correct? An attractive idea must be developed into a ________. Independence and a desire to determine one's own destiny are some of the entrepreneurs' personal factors in small-business success, others include: Jennifer would like to open her own business. A) Intrapreneurship B) Partnership C) Spin-offs D) Franchising. The Small Business Administration offers many courses to individuals interested in going into business or improving his or her business. Advantages to the franchisor Cost-effective growth . The amount of money it takes to get a new business off the ground can … The franchising system enables you to occupy one post with ease. Franchising is seen by many as a simple way to go into business for the first time. asked Apr 30, 2016 in Business by GlamPunk. 1. This company could also be referred to a. Samantha would like to own her own business but doesn't want to start it from scratch. Which of the following is NOT an advantage of franchising? Darrel is considering expanding the business by franchising. Leticia has always wanted to own her own restaurant but has read that restaurants have a very high failure rate. For one, the franchisor is not responsible for the day-to-day management of the individual franchise units. He was referring to, the reality that small business workers are more innovative than workers in large businesses, The invention of insulin and power steering by small businesses are examples of the ability of small businesses to provide, Increases in productivity for the past 200 years are characterized by, new ways to do a job with less effort and at a lower cost. The process of selecting one or more market segments to enter is called ________. Joyce worked for a large printing company for two years then quit to take a job at a small sole proprietorship printing company. Which of the following is NOT an advantage of franchising? Which of the following products is an example of intangible dominant? b. Decreased profits are considered one of the main disadvantages of franchising. Sylvia has an SBA-guaranteed business loan for the average life of such loans. High development costs b. 6) Which of the following is not a potential advantage of franchising for the franchisee? 4. Richard orders some Harley-Davidson Trikes for his inventory. 2. 3. The inherent risks usually associated with expansion are thereby reduced. A)Claims that the franchise contract is a standard agreement and that there is no need to read it or have an attorney look it over. 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