Question 1

A brand is a combination of name, logo, and design that ________.

Accepted Answer

A)  Becomes associated in the minds of consumers with the products or services of a company 
B)  Identifies the owner of a company 
C)  Expresses the philanthropic intentions of a company to consumers 
D)  Is cool to look at 
E)  Is vibrant 
A)  Becomes associated in the minds of consumers with the products or services of a company 
B)  Identifies the owner of a company 
C)  Expresses the philanthropic intentions of a company to consumers 
D)  Is cool to look at 
E)  Is vibrant A

Question 2

The multigenerational family-owned-and-operated business best exemplifies the company that provides an opportunity to "grow and go."

Accepted Answer

A) True 
 B)False  False

Question 3

At what stage of starting and running your business should you inform investors of your exit strategy?

Accepted Answer

A)  In the business plan 
B)  In your first annual report 
C)  Shortly before selling 
D)  Midway through your planned number of years in business 
E)  Never 
A)  In the business plan 
B)  In your first annual report 
C)  Shortly before selling 
D)  Midway through your planned number of years in business 
E)  Never A

Question 4

When Ray Kroc franchised McDonalds, what did he do that set the bar for future franchise operations?

Accepted Answer

A)  He provided training and support to franchisees to ensure that quality would be consistent in every McDonalds restaurant. 
B)  He sold franchises in competing territories to encourage franchise owners to compete and come up with new innovations for the company. 
C)  He made a lot of money. 
D)  He set the bar high. 
E)  He licensed the McDonalds name to a wide variety of products, such as hats and shirts. 
A)  He provided training and support to franchisees to ensure that quality would be consistent in every McDonalds restaurant. 
B)  He sold franchises in competing territories to encourage franchise owners to compete and come up with new innovations for the company. 
C)  He made a lot of money. 
D)  He set the bar high. 
E)  He licensed the McDonalds name to a wide variety of products, such as hats and shirts.

Question 5

A ________ represents the company's promise to consistently deliver a specific set of benefits to customers.

Accepted Answer

A)  Product line extension program 
B)  Product life cycle 
C)  Marketing campaign 
D)  Quality management system 
E)  Brand 
A)  Product line extension program 
B)  Product life cycle 
C)  Marketing campaign 
D)  Quality management system 
E)  Brand

Question 6

Licensors must be careful that a licensee ________.

Accepted Answer

A)  Doesn't damage the licensing company's name 
B)  Controls every aspect of the licensor's business 
C)  Doesn't go out of business 
D)  Follows all procedures of the licensor 
E)  Franchises the brand to as many others as possible 
A)  Doesn't damage the licensing company's name 
B)  Controls every aspect of the licensor's business 
C)  Doesn't go out of business 
D)  Follows all procedures of the licensor 
E)  Franchises the brand to as many others as possible

Question 7

Which of the following is a harvest strategy, not an exit strategy?

Accepted Answer

A)  Franchising 
B)  Merger 
C)  IPO (initial public offering) 
D)  Acquisition 
E)  All of the above 
A)  Franchising 
B)  Merger 
C)  IPO (initial public offering) 
D)  Acquisition 
E)  All of the above

Question 8

One of the advantages of an Employee Stock Ownership Plan is that ________.

Accepted Answer

A)  ESOPs offer tax breaks to the company 
B)  Employees will likely quit and leave 
C)  It will prevent employees from having control of the company 
D)  The owner will have to look for buyers in the general public 
E)  None of the above 
A)  ESOPs offer tax breaks to the company 
B)  Employees will likely quit and leave 
C)  It will prevent employees from having control of the company 
D)  The owner will have to look for buyers in the general public 
E)  None of the above

Question 9

Most business plans' exit strategies estimate that going public will happen within just four years from the launch date. This is a realistic plan and timeframe.

Accepted Answer

A) True 
 B)False

Question 10

An acquisition and a merger are the same thing.

Accepted Answer

A) True 
 B)False

Question 11

Line extension can work if the brand is strong and the new product is not completely dissimilar to the original.

Accepted Answer

A) True 
 B)False

Question 12

What are the drawbacks of a franchising agreement to the franchisor?

Accepted Answer

The drawbacks include: the potential for

Question 13

If you buy a McDonalds franchise and agree to pay a royalty fee of 12.5% annually, how much money will you owe McDonalds at the end of a year in which you sell $98,000 of product?

Accepted Answer

A)  $12,250 
B)  $13,250 
C)  $11,250 
D)  $10,250 
E)  $14,250 
A)  $12,250 
B)  $13,250 
C)  $11,250 
D)  $10,250 
E)  $14,250

Question 14

Harvesting your business means that you sell it, take it public, or merge with another company.

Accepted Answer

A) True 
 B)False

Question 15

An initial public offering (IPO), or going public, will mean selling shares of your company in the stock market.

Accepted Answer

A) True 
 B)False

Question 16

In most industries, twenty or thirty key benchmarks are used to help value a business.

Accepted Answer

A) True 
 B)False

Question 17

Franchising and licensing are called replication strategies because they are ways to obtain money from a business you created by letting others copy or replicate it.

Accepted Answer

A) True 
 B)False

Question 18

Adidas with its athletic shoes have applied their brand to expansion products such as Adidas cologne, getting profitable results.

Accepted Answer

A) True 
 B)False

Question 19

Ray Kroc and other entrepreneurs decided to focus less on profits and more on delivering consistent ________ to customers. They found that if they could consistently deliver ________, they could build a franchisable business. (Use the same word twice.)

Accepted Answer

A)  Quality 
B)  Service 
C)  Consistency 
D)  Royalties 
E)  Fees 
A)  Quality 
B)  Service 
C)  Consistency 
D)  Royalties 
E)  Fees

Question 20

What is an MBO and what are its advantages?

Accepted Answer

MBO or management buyout is where the en

Exam 21: Franchising, Licensing, and Harvesting: Cashing in Your Brand

A brand is a combination of name, logo, and design that ________.

The multigenerational family-owned-and-operated business best exemplifies the company that provides an opportunity to "grow and go."

At what stage of starting and running your business should you inform investors of your exit strategy?

When Ray Kroc franchised McDonalds, what did he do that set the bar for future franchise operations?

A ________ represents the company's promise to consistently deliver a specific set of benefits to customers.

Licensors must be careful that a licensee ________.

Which of the following is a harvest strategy, not an exit strategy?

One of the advantages of an Employee Stock Ownership Plan is that ________.

Most business plans' exit strategies estimate that going public will happen within just four years from the launch date. This is a realistic plan and timeframe.

An acquisition and a merger are the same thing.

Line extension can work if the brand is strong and the new product is not completely dissimilar to the original.

What are the drawbacks of a franchising agreement to the franchisor?

If you buy a McDonalds franchise and agree to pay a royalty fee of 12.5% annually, how much money will you owe McDonalds at the end of a year in which you sell $98,000 of product?

Harvesting your business means that you sell it, take it public, or merge with another company.

An initial public offering (IPO), or going public, will mean selling shares of your company in the stock market.

In most industries, twenty or thirty key benchmarks are used to help value a business.

Franchising and licensing are called replication strategies because they are ways to obtain money from a business you created by letting others copy or replicate it.

Adidas with its athletic shoes have applied their brand to expansion products such as Adidas cologne, getting profitable results.

Ray Kroc and other entrepreneurs decided to focus less on profits and more on delivering consistent ________ to customers. They found that if they could consistently deliver ________, they could build a franchisable business. (Use the same word twice.)

What is an MBO and what are its advantages?

Entrepreneurs Recognize Opportunities

Franchising

Finding Opportunity in an Existing Business

The Business Plan: Road Map to Success

Creating Business From Opportunity

Exploring Your Market

Developing the Right Marketing Mix and Plan

Pricing and Credit Strategies

Integrated Marketing Communications

Marketing Globally

Smart Selling and Effective Customer Service

Understanding and Managing Start-Up, Fixed, and Variable Costs

Using Financial Statements to Guide a Business

Cash Flow and Taxes

Financing Strategy: Debt, Equity, or Both

Addressing Legal Issues and Managing Risk

Operating for Success

Location, Facilities, and Layout

Human Resources and Management

Leadership and Ethical Practices

Filters

Ray Kroc and other entrepreneurs decided to focus less on profits and more on delivering consistent to customers. They found that if they could consistently deliver , they could build a franchisable business. (Use the same word twice.)