Ch 6/7 Entrep
Franchisees have the option of using the logo and symbols of the franchisor
False
Uniqueness in a product or service can be demonstrated through a new-new approach or a new-old approach
True
"Piggybacking" one's way into business involves using a _____ approach
new-old
Business related reasons for selling may include all but which of the following
the owner may be in trouble with suppliers changes in leasehold conditions changes in zoning which affect the business
When buying a small business you need to know all of the following items except
the owner's family stability and relationships
Who must negotiate the final deal
the potential buyer
The person who sells the franchise is usually required to do all of the following except
pay a fee
When buying a business, competition must be investigated because
price competition may affect profits new competition may reduce market share competition may be spending more money on advertising than you
Evaluating franchise opportunities include finding out more about which of the following
the franchisor, the franchise, the franchisee
Which of the following is NOT a disadvantage of a major franchise
track record of the franchisor
An advantage associated with franchising is
training and guidance provided by the franchisor, brand-name appeal of the franchise, track record of the other franchisees as proof of success
Reviewing personnel of the business about to be purchased is important in order to determine
whether employees with key skills will stay or leave, if employees are leaving will enough remain to operate the business, the cost of replacing an employee
An analysis of the competition should look for
unscrupulous practices
Have a seller retain a _____ interest in the business
minority
Which of the following costs do not add to the cost of franchising
prepaid utility bills
When should a potential franchisee receive the FDD (Franchise Disclosure Document)?
At least ten days before signing a contract or paying any money
Which of the following is NOT a key question a prospective buyer needs to ask in buying a business
What is the owner's personal net worth?
Competitor factors in a buying decision do not include
age of the competition's owners
A key question to ask when buying an on-going small business is which of the following
How many personnel are going to remain
Which is not a cost of franchising
Insurance, payroll, debt service
Business related reasons for selling do not include which of the following
changes in the product supply chain
What is an often overlooked asset when acquiring a new business
firm's records
A _____ is a system of distibution that enables a supplier to arrange for a dealer to handle a specific product or service under certain mutually agreed upon conditions
franchise
Which of the following is a question which can be sidestepped when buying a business
all can be sidestepped
The franchisor's responsibilities include providing
company name, symbols and logos, management and training
An advantage to buying an on-going business is
reduced concern over future operations time and effort are reduced it may be purchased at a bargain price
When one discusses upside gain and downside loss, one is talking about
risk versus reward
The inventory should be examined for which for which of the following
salability, does a physical count correspond with the book count?, is it up to date?
Which is not a key question to ask when buying a business
Is the building heated with gas or electric?
Which of the following are trends creating business opportunities
green products, alternative energy, health care
Which of the following costs add to the cost of franchising
insurance, payroll, legal and professional fees
When one designs a unique good or service, the individual is said to have used a(n) _____ approach to starting the business
new-new
What is the largest source of new business ideas among women
prior job
The "right questions" the prospective small business owner should ask about a franchise deal with
the franchisor, the franchise, the market
What is the largest source of new business ideas among men
prior job
After all of your investigation into a franchise, the final decision should be up to
you
The _____ approach indicates the importance of people's awareness of their daily lives for developing new business ideas
new-new
When purchasing an existing business, the prospective owner should conduct an assessment of the business's current group of employees
True
The individual who arranges for a dealer to handle a specific product or service under certain mutually agreed upon conditions is known as the
franchisor
A franchise system can be used for handling
goods and services
The extra value a business can command in a sale is known as
goodwill
Which of the following is an intangible asset
goodwill
Starting a business by adapting something already on the market is called what approach
new-old
The Franchise Disclosure Document (FDD) is a legally required disclosure document that must be presented to potential franchisees during presale discussions
True
The elimination of time and effort associated with starting a company is an advantage of acquiring an ongoing venture
True
The prospective investor should get as much information as possible on the franchisor
True
The terms upside gain and downside loss refer to the profits the business can make and the losses it can suffer
True
When this asset is purchased, the buyer should be sure to deduct those so old that they are deemed uncollectible
accounts receivable
The person who gets the franchise is usually required to do all of the following except
design a logo for the unit
The individual who buys the franchise is the
franchisee
Coming up with a unique good or service is a _____ approach, while adapting something that is currently on the market or extending the offering to an area where it is not presently available is a(n) _____ approach
new-new, new-old
The advantages of franchising include
training and guidance, brand-name appeal, proven track record
Which franchise is not included in the top ten franchises
Jimmy John's
Which is not a start-up expense
depreciation
In negotiating a deal to purchase an existing business, it is possible to request that the seller retain a minority interest in the firm
True
Perhaps the greatest advantage of buying a franchise, as compared to starting a new business or buying an existing one, is that the franchisor will usually provide both training and guidance to the franchisee
True
The franchisee's responsibilities include
a finacial investment, payment of a fee, engaging in a continuous business relationship
An agreement not to compete is also known as
a legal restraint of trade
The UFOC contains how many sections
23
The Federal Trade Commission does not provide information on franchise success
False
