Exam 4: Franchising and the Entrepreneur

McDonald's is an example of a ________ franchise.

It is important for potential entrepreneurs to have extensive experience in the business in which they are buying a franchise.

The FTC's philosophy focuses on:

By the 1920s,franchising was rife with fraudulent practitioners .

A significant advantage a franchisee has over the independent small business owner is participation in the franchisor's centralized and large-volume buying power

Franchisors can require franchisees to purchase materials and supplies only from approved suppliers.

A poor image for the entire franchise could result from some franchisees using inferior products to cut costs.

Pure franchising is also referred to as:

The first,second and third growth wave in franchising respectively,are:

The payment the franchisee makes to the franchiser based on gross sales is:

If a franchisor encourages you to sign without reading the agreement,or discourages you from "spending the money on an attorney," this is a warning sign that the franchiser might be dishonest.

Explain the benefits of franchising to the franchisee.

As with most franchises,the key to McDonald's success is the standardization of their product,processes,etc.

Typically,because the franchisor's attorney prepares franchise contracts,the provision favors the franchisee.

The Uniform Franchise Offering Circular is now called the:

By definition,a franchise is owned by a semi-independent franchisee who pays a fee to a franchiser in return for the right to sell the franchised goods or services.

The fastest growth rate in franchises is among:

The franchiser has the right to cancel a contract if a franchisee:

In franchising,royalties are paid by the franchisee to the franchisor.

Franchisors are obligated to renew a franchisee's contract unless there has been malfeasance on the part of the franchise.