Deck 12: Franchising

Question 1

A franchisor is under no obligation to disclose remuneration gained from product purchases from designated suppliers.

Answer 1

False

Question 2

The value of the franchise is enhanced when the delivery of the product validates the marketing message.

Answer 2

True

Question 3

Which of the following is the most valuable asset in a franchise system?

A) Field support
B) Trade name
C) Operational support
D) Service delivery system

Answer 3

B

Question 4

Not all franchises have (or even need)a well-defined service delivery system.

Question 5

The capital outlay requirements to become a franchisee with a dominant national player are generally less than what it costs to join a regionally successful operation.

Question 6

Transaction analysis considers how customers purchase goods and services from the franchise outlets.

Question 7

Research to develop a demographic profile of the customer base will not include 'non-user' profiles.

Question 8

What aspect of franchising does area of dominant influence (ADI)relate to?

A) Finance
B) Training
C) Purchasing
D) Marketing

Question 9

In franchising,the ________ is the concept innovator who grows by seeking others to operate the concept in local markets.

Question 10

One limitation of franchising is that when demand is high,it is difficult to control the size of the overall venture.

Question 11

Franchising offers a thoughtful system for reshaping and executing a delivery system designed to extract maximum ________ from the opportunity.

Question 12

At the most fundamental level,the ________ is the defining quality of the opportunity recognition process.

Question 13

With regard to national media buys,"best efforts" relates to the quality and diversity of the advertising and PR support.

Question 14

Franchisor field support can be used to determine the stability and strength of the organization.

Question 15

At the center of the Franchise Relationship Model is the:

A) Customer
B) Market
C) Contract
D) Financial structure

Question 16

Personality variables such as self-confident,conservative,and independent are used to segment markets.

Question 17

The service delivery system is the basis for a franchise venture's competitive advantage.

Question 18

Franchisees are best motivated with bonuses paid for growth in the number of stores.

Question 19

Since operations are expanded by adding owner-operated units across a broad geography,retail franchising is not considered to be as pure a form of entrepreneurship as say,a medical device venture.

Question 20

The best franchisors view their field support function as a diplomatic opportunity.

Question 21

Growth and ________ are the essence of the franchise mentality.

Question 22

If adding suppliers to the approved list is nearly impossible,this constitutes a de facto ________ agreement.

Question 23

A demographic profile is a compilation of personal characteristics that enables the company to define the ________ customer.

Question 24

The road map for marshalling resources for the franchise comes from establishing the ________.

Question 25

What license agreement binds the franchisee to the purchase of a specifically branded product?

Question 26

Describe the ideal business format of a top-ranked franchise operation.

Question 27

Describe the entrepreneurial nature of the franchising model.

Question 28

The smart franchise uses the ever-growing system of franchisees and company outlets to continuously gather ________.

Question 29

What are the three major profiles used to define the primary target audience?

Question 30

A ________ profile segments potential customers based on social class,lifestyle,and personality traits.

Question 31

The end result of the organization,execution,and transfer of the service delivery system is the firm's ________.

Question 32

In the Franchise Relationship Model,the financial structure flows from pro forma analysis of customer demand and the cost associated with development and execution of the ________.