Question 1

Which statement about franchising is most likely true?

Accepted Answer

A)  Franchisees provide downstream marketing channel functions for a manufacturer. 
B)  Franchisees are company subsidiaries of a vertically integrated manufacturer. 
C)  Franchisors assume the identity of franchisees to convey vertical integration. 
D)  Franchisors provide downstream marketing channel functions for franchisees. 
E)  Franchising first developed in the U.S. after WWII in the soft drink industry. 
A)  Franchisees provide downstream marketing channel functions for a manufacturer. 
B)  Franchisees are company subsidiaries of a vertically integrated manufacturer. 
C)  Franchisors assume the identity of franchisees to convey vertical integration. 
D)  Franchisors provide downstream marketing channel functions for franchisees. 
E)  Franchising first developed in the U.S. after WWII in the soft drink industry.

Question 2

Kyle owns a Cars-To-Go franchise.Kyle's franchising contract stipulates that he must purchase the cars he rents from the national Cars-To-Go franchisor,although Kyle could save money by purchasing cars from a local dealership.Which term best describes this contract requirement?

Accepted Answer

A)  supply fees 
B)  tied sales 
C)  sunk costs 
D)  front end fees 
E)  territorial exclusivity 
A)  supply fees 
B)  tied sales 
C)  sunk costs 
D)  front end fees 
E)  territorial exclusivity

Question 3

A franchisor would most likely punish a franchisee for a contract violation when _________.

Accepted Answer

A)  the franchisee runs a shabby facility in a highly visible location 
B)  the franchisee is part of a dense, tightly knit network of franchisees 
C)  strong relational governance allows the system to operate on norms of solidarity 
D)  the franchisor has invested significantly in the franchisee that has made the violation 
E)  performance ambiguity prevents the franchisor from clearly identifying the enforcement situation 
A)  the franchisee runs a shabby facility in a highly visible location 
B)  the franchisee is part of a dense, tightly knit network of franchisees 
C)  strong relational governance allows the system to operate on norms of solidarity 
D)  the franchisor has invested significantly in the franchisee that has made the violation 
E)  performance ambiguity prevents the franchisor from clearly identifying the enforcement situation

Question 4

Maria recently signed a franchise contract with Perfect Pizza.She will have to acquire inventory,purchase equipment,and advertise the restaurant's opening.If Maria's franchise fails,which investment will she never recover?

Accepted Answer

A)  sunk costs 
B)  lump sums 
C)  variable fees 
D)  fixed costs 
E)  sales royalties 
A)  sunk costs 
B)  lump sums 
C)  variable fees 
D)  fixed costs 
E)  sales royalties

Question 5

Describe the three sections of most franchise contracts that determine who will enter the arrangement and how the franchise will function.

Accepted Answer

There are three sections of a franchise

Question 6

What is a competitive advantage of franchising?

Accepted Answer

A)  attracting new customers 
B)  focusing on a branded concept 
C)  forming long-term contracts 
D)  developing multiple products 
E)  separating channel functions 
A)  attracting new customers 
B)  focusing on a branded concept 
C)  forming long-term contracts 
D)  developing multiple products 
E)  separating channel functions

Question 7

Company X,a franchisor,used franchisees to build the Company X brand and the company system.Now that Company X is large and successful,it is using pricing tactics and restrictive contract terms to force franchisees to sell their franchises back to Company X.Which term best describes the actions of Company X?

Accepted Answer

A)  free riding 
B)  negligent franchising 
C)  opportunistic licensing 
D)  redirection of ownership 
E)  organizational consolidation 
A)  free riding 
B)  negligent franchising 
C)  opportunistic licensing 
D)  redirection of ownership 
E)  organizational consolidation

Question 8

According to Howard Schultz,the founder of Starbucks,franchising ________.

Accepted Answer

A)  serves as the best way to run a channel 
B)  prevents firms from growing fast enough 
C)  improves product and service consistency 
D)  leads firms to propagate major problems 
E)  creates a strong sense of brand ownership 
A)  serves as the best way to run a channel 
B)  prevents firms from growing fast enough 
C)  improves product and service consistency 
D)  leads firms to propagate major problems 
E)  creates a strong sense of brand ownership

Question 9

A franchisee engaging in opportunistic holdup with a franchisor would most likely ________,

Accepted Answer

A)  demand tie-in sales 
B)  request lower royalties 
C)  negotiate for rent relief 
D)  invest in equipment 
E)  share profits 
A)  demand tie-in sales 
B)  request lower royalties 
C)  negotiate for rent relief 
D)  invest in equipment 
E)  share profits

Question 10

Which of the following would LEAST likely be addressed in a franchise contract?

Accepted Answer

A)  organizational structure 
B)  territorial exclusivity 
C)  terms of renewal 
D)  marketing strategy 
E)  intellectual property protection 
A)  organizational structure 
B)  territorial exclusivity 
C)  terms of renewal 
D)  marketing strategy 
E)  intellectual property protection

Question 11

Coffee Cups,a national coffee shop franchise,uses a plural form strategy.The franchisor frequently compares the performance of company and franchisee outlets to encourage each to improve sales.Which of the following most likely enables the Coffee Cups franchise to make such comparisons?

Accepted Answer

A)  benchmarks 
B)  trends 
C)  guidelines 
D)  mutual strategies 
E)  business formats 
A)  benchmarks 
B)  trends 
C)  guidelines 
D)  mutual strategies 
E)  business formats

Question 12

Multi-unit franchising is becoming increasingly common.Briefly explain the functionality and advantages of multi-unit franchising.

Accepted Answer

Rather than dealing with a multitude of

Question 13

Which aspect of franchising most likely enables a franchisee to build a client base quickly?

Accepted Answer

A)  brand equity 
B)  facility design 
C)  market surveys 
D)  financial advice 
E)  management training 
A)  brand equity 
B)  facility design 
C)  market surveys 
D)  financial advice 
E)  management training

Question 14

What is a key characteristic of franchising?

Accepted Answer

A)  The franchisor assumes the identity of the franchisee. 
B)  Franchisees manufacture the products sold by franchisors. 
C)  The franchisee appears to be a subsidiary of the franchisor. 
D)  The franchisee sells competing brands in the product category. 
E)  Franchisors and franchisees share downstream channel functions. 
A)  The franchisor assumes the identity of the franchisee. 
B)  Franchisees manufacture the products sold by franchisors. 
C)  The franchisee appears to be a subsidiary of the franchisor. 
D)  The franchisee sells competing brands in the product category. 
E)  Franchisors and franchisees share downstream channel functions.

Question 15

A plural form strategy is more effective when franchisors monitor their own units using mystery shoppers and unannounced field audits.

Accepted Answer

A) True 
 B)False

Question 16

What is LEAST likely an advantage of franchise systems that include both company-owned outlets and franchisees?

Accepted Answer

A)  testing new ideas 
B)  training employees 
C)  refining business formats 
D)  enforcing contract requirements 
E)  motivating both sides to improve 
A)  testing new ideas 
B)  training employees 
C)  refining business formats 
D)  enforcing contract requirements 
E)  motivating both sides to improve

Question 17

What is the most likely reason that many franchisors also run company-owned stores?

Accepted Answer

A)  promotion strategies 
B)  market differences 
C)  brand equity shifts 
D)  service outputs 
E)  capital investments 
A)  promotion strategies 
B)  market differences 
C)  brand equity shifts 
D)  service outputs 
E)  capital investments

Question 18

Which of the following is LEAST likely an advantage of franchising for franchisors?

Accepted Answer

A)  obtaining financial capital 
B)  growing the brand quickly 
C)  avoiding monitoring costs 
D)  motivating local managers 
E)  overseeing hiring practices 
A)  obtaining financial capital 
B)  growing the brand quickly 
C)  avoiding monitoring costs 
D)  motivating local managers 
E)  overseeing hiring practices

Question 19

In the EU,a franchise is distinguished as having all of the following features EXCEPT ________.

Accepted Answer

A)  use of a common name 
B)  use of a common sign with a uniform facility presentation 
C)  communication of know-how from franchisor to franchisee 
D)  transfer of regular stock options from franchisor to franchisee 
E)  continuing provision of commercial assistance by the franchisor to the franchisee 
A)  use of a common name 
B)  use of a common sign with a uniform facility presentation 
C)  communication of know-how from franchisor to franchisee 
D)  transfer of regular stock options from franchisor to franchisee 
E)  continuing provision of commercial assistance by the franchisor to the franchisee

Question 20

In a franchising arrangement,the franchisee acts as a separate business entity but is required to return all of its profits to the franchisor.

Accepted Answer

A) True 
 B)False

Which statement about franchising is most likely true?

Kyle owns a Cars-To-Go franchise.Kyle's franchising contract stipulates that he must purchase the cars he rents from the national Cars-To-Go franchisor,although Kyle could save money by purchasing cars from a local dealership.Which term best describes this contract requirement?

A franchisor would most likely punish a franchisee for a contract violation when _________.

Maria recently signed a franchise contract with Perfect Pizza.She will have to acquire inventory,purchase equipment,and advertise the restaurant's opening.If Maria's franchise fails,which investment will she never recover?

Describe the three sections of most franchise contracts that determine who will enter the arrangement and how the franchise will function.

What is a competitive advantage of franchising?

According to Howard Schultz,the founder of Starbucks,franchising ________.

A franchisee engaging in opportunistic holdup with a franchisor would most likely ________,

Which of the following would LEAST likely be addressed in a franchise contract?

Coffee Cups,a national coffee shop franchise,uses a plural form strategy.The franchisor frequently compares the performance of company and franchisee outlets to encourage each to improve sales.Which of the following most likely enables the Coffee Cups franchise to make such comparisons?

Multi-unit franchising is becoming increasingly common.Briefly explain the functionality and advantages of multi-unit franchising.

Which aspect of franchising most likely enables a franchisee to build a client base quickly?

What is a key characteristic of franchising?

A plural form strategy is more effective when franchisors monitor their own units using mystery shoppers and unannounced field audits.

What is LEAST likely an advantage of franchise systems that include both company-owned outlets and franchisees?

What is the most likely reason that many franchisors also run company-owned stores?

Which of the following is LEAST likely an advantage of franchising for franchisors?

In the EU,a franchise is distinguished as having all of the following features EXCEPT ________.

In a franchising arrangement,the franchisee acts as a separate business entity but is required to return all of its profits to the franchisor.

Understanding Channel Strategies

End-User Analysis: Segmenting and Targeting

Channel Analysis: Auditing Marketing Channels

Make Versus Buy Channel Analysis

Designing Channel Structures and Strategies

Retailing Structures and Strategies

Wholesaling Structures and Strategies

Emerging Channel Structures and Strategies

Managing Channel Power

Managing Channel Conflict

Managing Channel Relationships

Managing Channel Policies and Legalities

Managing Channel Logistics

Filters

Exam 8: Franchising Structures and Strategies

Which statement about franchising is most likely true?

Kyle owns a Cars-To-Go franchise.Kyle's franchising contract stipulates that he must purchase the cars he rents from the national Cars-To-Go franchisor,although Kyle could save money by purchasing cars from a local dealership.Which term best describes this contract requirement?

A franchisor would most likely punish a franchisee for a contract violation when _________.

Maria recently signed a franchise contract with Perfect Pizza.She will have to acquire inventory,purchase equipment,and advertise the restaurant's opening.If Maria's franchise fails,which investment will she never recover?

Describe the three sections of most franchise contracts that determine who will enter the arrangement and how the franchise will function.

What is a competitive advantage of franchising?

According to Howard Schultz,the founder of Starbucks,franchising ________.

A franchisee engaging in opportunistic holdup with a franchisor would most likely ________,

Which of the following would LEAST likely be addressed in a franchise contract?

Coffee Cups,a national coffee shop franchise,uses a plural form strategy.The franchisor frequently compares the performance of company and franchisee outlets to encourage each to improve sales.Which of the following most likely enables the Coffee Cups franchise to make such comparisons?

Multi-unit franchising is becoming increasingly common.Briefly explain the functionality and advantages of multi-unit franchising.

Which aspect of franchising most likely enables a franchisee to build a client base quickly?

What is a key characteristic of franchising?

A plural form strategy is more effective when franchisors monitor their own units using mystery shoppers and unannounced field audits.

What is LEAST likely an advantage of franchise systems that include both company-owned outlets and franchisees?

What is the most likely reason that many franchisors also run company-owned stores?

Which of the following is LEAST likely an advantage of franchising for franchisors?

In the EU,a franchise is distinguished as having all of the following features EXCEPT ________.

In a franchising arrangement,the franchisee acts as a separate business entity but is required to return all of its profits to the franchisor.

Understanding Channel Strategies

End-User Analysis: Segmenting and Targeting

Channel Analysis: Auditing Marketing Channels

Make Versus Buy Channel Analysis

Designing Channel Structures and Strategies

Retailing Structures and Strategies

Wholesaling Structures and Strategies

Emerging Channel Structures and Strategies

Managing Channel Power

Managing Channel Conflict

Managing Channel Relationships

Managing Channel Policies and Legalities

Managing Channel Logistics

Filters