Full Answer
Which of the following is true of franchising quizlet?
Which of the following is true about franchising? A franchise is an agreement whereby independant businessperson is given exclusive rights to sell a specified good or service.
Which of the following describes a franchise?
A franchise (or franchising) is a method of distributing products or services involving a franchisor, who establishes the brand's trademark or trade name and a business system, and a franchisee, who pays a royalty and often an initial fee for the right to do business under the franchisor's name and system.
What 3 things are typically included in a franchise agreement?
Franchise agreements vary between different franchises, but these seven areas should be addressed in every franchise agreement.Use of Trademarks.Location of the Franchise.Term of the Franchise.Franchisee's Fees and Other Payments.Obligations and Duties of the Franchisor.Restriction on Goods and Services Offered.More items...
What are 5 characteristics of a franchise?
5 Characteristics of a Profitable FranchiseGOOD LOCATION:FRANCHISOR'S SUPPORT.PROVEN TRACK RECORD.ESTIMATED BRAND REPUTATION.GOOD MEDIA RELATION.
Which of the following is not true about a franchise?
They are always small owner managed businesses is the correct option.
What is the main purpose of franchising?
Franchising allows bigger businesses to branch out and grow while giving people the opportunity to run their own business with the help and support of a larger company that has a proven formula for success.
What is included in a franchise agreement quizlet?
Legal contract which sets out the commercial deal between franchisor and franchisee, including investments requirements, ongoing fees & costs, and protections for both parties.
What are advantages of franchising?
Advantages of buying a franchise You don't necessarily need business experience to run a franchise. Franchisors usually provide the training you need to operate their business model. Franchises have a higher rate of success than start-up businesses. You may find it easier to secure finance for a franchise.
What are the basic requirements of the franchise Rule?
The Rule requires franchisors to provide all potential franchisees with a disclosure document containing 23 specific items of information about the offered franchise, its officers, and other franchisees.
What are the 4 types of franchising?
The four types of franchise business you can invest inJob or operator franchise. These owner operator franchises are usually home based, which keeps overheads down to a minimum. ... Management franchise. ... Retail and fast food franchises. ... Investment franchise.
What are the characteristic of a franchise?
8 Characteristics of Highly Profitable Franchises1) An excellent location. ... 2) A dedicated, involved franchisor. ... 3) A proven track record. ... 4) Little or no competition. ... 5) Recession-resistant. ... 6) Free of legal entanglements. ... 7) Not afraid of effective change. ... 8) Priced right.
What are the good characteristics of a successful franchise?
12 Characteristics of a Successful FranchiseeProvide benefit to your community that might otherwise not be available. Not everyone has a taste for risk. ... Not afraid to put in the hours. ... Work under pressure. ... Desire to learn. ... Willingness to delegate. ... Adaptability and flexibility. ... Leader / Communicator. ... Team player.More items...•
What does franchise mean in economics?
Understanding Franchises A franchise is a joint venture between a franchisor and a franchisee. The franchisor is the original business. It sells the right to use its name and idea. The franchisee buys this right to sell the franchisor's goods or services under an existing business model and trademark.
Is the person who purchases a franchise agreement?
The franchisee is the individual who buys into the original company by purchasing the right to sell the franchisor's goods or services under the existing business model and trademark.
What type of business is the easiest to form?
sole proprietorshipA sole proprietorship is the easiest and simplest form of business ownership. It is owned by one person. There is no distinction between the person and the business. The owner shares in the business's profits and losses.
Does a sole proprietor own the entire business?
Sole proprietors own all the assets of the business and the profits generated by it. They also assume complete responsibility for any of its liabilities or debts. In the view of the law and the public, you are one in the same with the business.
Answer
In a franchise, a franchisor allows a franchisee to use its business systems, trademarks, and processes
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Why is buying a franchise important?
Buying a franchise can dramatically decrease the risk of failure. The reason is because it helps in minimizing the risk of the franchisor and the major view the full answer
Does buying a franchise increase the risk of failure?
Buying a franchise can dramatically increase the risk of failure.
Is there a difference between buying a franchise and buying an existing business?
There is no difference in the risk of buying a franchise compared to buying an existing business.
What is franchisee right?
Entitles the franchisee the right to open a business in a given area.
How do franchisees benefit from franchising?
Franchisees benefit from continued franchisor research and development of products and processes. Franchisees benefit from national advertising campaigns that help build the business's brand. Franchisees benefit from group purchasing power for supplies.
Do franchisees have to be successful to continue to pay royalties?
Franchisees must be successful so they will continue to pay royalties and purchase supplies.
Can a franchisor negotiate a deal with a granchisee?
The franchisor might negotiate a complete different deal with the granchisee in order to get started with a self-sufficient operator.
What is franchise agreement?
The franchise agreement is a contract that describes requirements for purchasing supplies displaying marketing materials in the franchise fee structure
Why are franchises more successful?
Franchisees are likely to be more successful when the franchisor provides high-quality products and helps with finding locations
What do franchisors need?
franchisors must have a high-quality support program in place
