Question 1

Some franchisers prefer franchisees who own a large number of franchise outlets because it speeds their growth.

Accepted Answer

A) True 
 B)False

Question 2

A disadvantage of franchising is the voluminous paperwork needed to provide disclosure documents to potential franchisees.

Accepted Answer

A) True 
 B)False

Question 3

The franchiser exercises complete control over the franchisee's business operations.

Accepted Answer

A) True 
 B)False

Question 4

Which of the following is true about franchising?

Accepted Answer

A)  The parties in a franchising arrangement usually compete with each other for success. 
B)  The franchisee is the company that owns the franchise's name and distinctive elements and grants others the right to sell its product. 
C)  A franchise is an agreement whereby an independent businessperson is given exclusive rights to sell a specified good or service. 
D)  The franchiser is usually an independent local businessperson who agrees with the franchise owner to operate the business on a local or regional basis. 
A)  The parties in a franchising arrangement usually compete with each other for success. 
B)  The franchisee is the company that owns the franchise's name and distinctive elements and grants others the right to sell its product. 
C)  A franchise is an agreement whereby an independent businessperson is given exclusive rights to sell a specified good or service. 
D)  The franchiser is usually an independent local businessperson who agrees with the franchise owner to operate the business on a local or regional basis.

Question 5

Planning to start one's own business begins with searching for a good or service to sell.

Accepted Answer

A) True 
 B)False

Question 6

The disclosure agreement is a document that provides information on twenty items required by the Federal Trade Commission.

Accepted Answer

A) True 
 B)False

Question 7

The process of finding a small-but profitable-demand for something and producing a custom-made product for that market is known as:

Accepted Answer

A)  lead marketing. 
B)  challenge marketing. 
C)  follower marketing. 
D)  niche marketing. 
A)  lead marketing. 
B)  challenge marketing. 
C)  follower marketing. 
D)  niche marketing.

Question 8

What could be the advantages and disadvantages of purchasing an existing small business?

Accepted Answer

Reasons to buy an existing business are:

Question 9

Which of the following sources of information can help small business entrepreneurs better understand an area's needs?

Accepted Answer

A)  The Office of International Trade 
B)  Chambers of commerce 
C)  The Directory of Trade Associations in the U.S. 
D)  The Small Business Administration 
A)  The Office of International Trade 
B)  Chambers of commerce 
C)  The Directory of Trade Associations in the U.S. 
D)  The Small Business Administration

Question 10

_____ is a marketing system based on a legal arrangement that permits one party to conduct business as an individual owner while abiding by the terms and conditions set by the second party.

Accepted Answer

A)  Joint venture 
B)  Turnkey projects 
C)  Wholly owned subsidiary 
D)  Franchising 
A)  Joint venture 
B)  Turnkey projects 
C)  Wholly owned subsidiary 
D)  Franchising

Question 11

Product and trademark franchising:

Accepted Answer

A)  grants the franchisee the right to sell a widely recognized brand. 
B)  is the systematic gathering, recording, and analyzing of data related to the marketing of goods and services. 
C)  is the concept that two or more people, working together in a coordinated way, can accomplish more than the sum of their independent efforts. 
D)  grants a franchisee the right to market the brand and trademark and to use a complete operating system. 
A)  grants the franchisee the right to sell a widely recognized brand. 
B)  is the systematic gathering, recording, and analyzing of data related to the marketing of goods and services. 
C)  is the concept that two or more people, working together in a coordinated way, can accomplish more than the sum of their independent efforts. 
D)  grants a franchisee the right to market the brand and trademark and to use a complete operating system.

Question 12

In the context of small businesses, franchises tend to fail because of not having enough money to cover all needs.

Accepted Answer

A) True 
 B)False

Question 13

Product and trademark franchising can be observed in the restaurant industry.

Accepted Answer

A) True 
 B)False

Question 14

Which of the following is true about a franchise fee?

Accepted Answer

A)  It is a fee paid to the franchiser at regular intervals of time. 
B)  It is based on a percentage of the franchisee's gross revenue. 
C)  It is a one-time fee paid to the franchiser. 
D)  It is a continuous fees paid by the franchiser to the franchisee. 
A)  It is a fee paid to the franchiser at regular intervals of time. 
B)  It is based on a percentage of the franchisee's gross revenue. 
C)  It is a one-time fee paid to the franchiser. 
D)  It is a continuous fees paid by the franchiser to the franchisee.

Question 15

_____ is the concept that two or more people, working together in a coordinated way, can accomplish more than the sum of their independent efforts.

Accepted Answer

A)  Duality 
B)  Due diligence 
C)  Niche marketing 
D)  Synergy 
A)  Duality 
B)  Due diligence 
C)  Niche marketing 
D)  Synergy

Question 16

In a franchise, which of the following is an advantage for a franchiser?

Accepted Answer

A)  Brand recognition 
B)  Lower operating costs 
C)  Financial assistance 
D)  Share in local or national promotion 
A)  Brand recognition 
B)  Lower operating costs 
C)  Financial assistance 
D)  Share in local or national promotion

Question 17

In the context of franchising, the success of fast food restaurants is related to the increasing number of women working outside the home.

Accepted Answer

A) True 
 B)False

Question 18

The system of gathering, recording, classifying, analyzing, and interpreting data related to merchandising of goods and services is known as:

Accepted Answer

A)  market research. 
B)  operational research. 
C)  drip marketing. 
D)  loyalty marketing. 
A)  market research. 
B)  operational research. 
C)  drip marketing. 
D)  loyalty marketing.

Question 19

In the context of franchising, a disclosure statement provides demographic information.

Accepted Answer

A) True 
 B)False

Question 20

What are the reasons for starting a new business and for not starting a new business?

Accepted Answer

Some reasons for starting a new business

Some franchisers prefer franchisees who own a large number of franchise outlets because it speeds their growth.

A disadvantage of franchising is the voluminous paperwork needed to provide disclosure documents to potential franchisees.

The franchiser exercises complete control over the franchisee's business operations.

Which of the following is true about franchising?

Planning to start one's own business begins with searching for a good or service to sell.

The disclosure agreement is a document that provides information on twenty items required by the Federal Trade Commission.

The process of finding a small-but profitable-demand for something and producing a custom-made product for that market is known as:

What could be the advantages and disadvantages of purchasing an existing small business?

Which of the following sources of information can help small business entrepreneurs better understand an area's needs?

_____ is a marketing system based on a legal arrangement that permits one party to conduct business as an individual owner while abiding by the terms and conditions set by the second party.

Product and trademark franchising:

In the context of small businesses, franchises tend to fail because of not having enough money to cover all needs.

Product and trademark franchising can be observed in the restaurant industry.

Which of the following is true about a franchise fee?

_____ is the concept that two or more people, working together in a coordinated way, can accomplish more than the sum of their independent efforts.

In a franchise, which of the following is an advantage for a franchiser?

In the context of franchising, the success of fast food restaurants is related to the increasing number of women working outside the home.

The system of gathering, recording, classifying, analyzing, and interpreting data related to merchandising of goods and services is known as:

In the context of franchising, a disclosure statement provides demographic information.

What are the reasons for starting a new business and for not starting a new business?

Starting Your Small Business

Family-Owned Businesses

Forms of Ownership of Small Businesses

Maintaining Good Government Relations and Business Ethics

Planning, Organizing, and Managing a Small Business

How to Obtain the Right Financing for Your Business

Developing Marketing Strategies

Promoting and Distributing

How to Obtain and Manage Human Resources and Diversity in Small Companies

How to Maintain Relationships With Your Employees and Their Representatives

Obtaining and Laying Out Operating Facilities

Purchasing, Inventory, and Quality Control

Basic Financial Planning

Budgeting and Controlling Operations and Taxes

Using Computer Technology in Small Businesses

Risk Management, Insurance, and Crime Prevention

Filters

Exam 5: Becoming the Owner of a Small Business

Some franchisers prefer franchisees who own a large number of franchise outlets because it speeds their growth.

A disadvantage of franchising is the voluminous paperwork needed to provide disclosure documents to potential franchisees.

The franchiser exercises complete control over the franchisee's business operations.

Which of the following is true about franchising?

Planning to start one's own business begins with searching for a good or service to sell.

The disclosure agreement is a document that provides information on twenty items required by the Federal Trade Commission.

The process of finding a small-but profitable-demand for something and producing a custom-made product for that market is known as:

What could be the advantages and disadvantages of purchasing an existing small business?

Which of the following sources of information can help small business entrepreneurs better understand an area's needs?

_____ is a marketing system based on a legal arrangement that permits one party to conduct business as an individual owner while abiding by the terms and conditions set by the second party.

Product and trademark franchising:

In the context of small businesses, franchises tend to fail because of not having enough money to cover all needs.

Product and trademark franchising can be observed in the restaurant industry.

Which of the following is true about a franchise fee?

_____ is the concept that two or more people, working together in a coordinated way, can accomplish more than the sum of their independent efforts.

In a franchise, which of the following is an advantage for a franchiser?

In the context of franchising, the success of fast food restaurants is related to the increasing number of women working outside the home.

The system of gathering, recording, classifying, analyzing, and interpreting data related to merchandising of goods and services is known as:

In the context of franchising, a disclosure statement provides demographic information.

What are the reasons for starting a new business and for not starting a new business?

Starting Your Small Business

Family-Owned Businesses

Forms of Ownership of Small Businesses

Maintaining Good Government Relations and Business Ethics

Planning, Organizing, and Managing a Small Business

How to Obtain the Right Financing for Your Business

Developing Marketing Strategies

Promoting and Distributing

How to Obtain and Manage Human Resources and Diversity in Small Companies

How to Maintain Relationships With Your Employees and Their Representatives

Obtaining and Laying Out Operating Facilities

Purchasing, Inventory, and Quality Control

Basic Financial Planning

Budgeting and Controlling Operations and Taxes

Using Computer Technology in Small Businesses

Risk Management, Insurance, and Crime Prevention

Filters