Chapter 5 & 6

Business format franchising OR maybe Product distribution franchising

A McDonald's franchise includes the right to use McDonald's many trade names, specifications of the product to be sold, operating methods, marketing plan, and national advertising. Franchisees pay to the franchisor both an up-front fee to obtain the franchise rights and a percentage of gross sales. Which of the following types of franchising does this situation illustrate?

franchise.

A legal agreement that allows a business to be operated using the name and business procedures of another firm is referred to as a:

bootstrapping.

All of the following are major concerns of moonlighting EXCEPT:

business-to-business (B2B)

In _____ sales, one firm sells to another firm.

closing

In door-to-door selling, _____ refers to getting the customer to agree to buy.

having a location where there is enough foot or vehicle traffic.

In stand retail, the key success factor for a stand is:

the ownership of a portion of a business.

Equity refers to:

stand retailing

One of the most ancient forms of small business is:

earn-outs

Purchases of existing businesses may occur through _____ in which the business is bought over a period of time with money obtained from the business.

Professional managers are hired to share the management load.

What would happen when a small business that is growing becomes too great to be handled alone by an individual owner?

the rights granted.

The value of a franchise is determined by:

not having enough money available to the business to cover shortfalls in sales or profits.

Undercapitalization refers to:

It provides the franchisee with specific brand named products, which are resold by the franchisee in a specified territory.

Which of the following holds true for product distribution franchising?

Existing managers and employees resisting change.

Which of the following is a disadvantage of purchasing an existing business?

Balance sheet

Which of the following is a financial statement that will be checked during due diligence when buying an existing business?

Spin-off

Which of the following is a way to start business with established customers?

Franchising

Which of the following is one of the ways to get into small business management?

It should include an online website editor so one can make changes to his or her site without buying web-authoring software.

Which of the following is true about a hosting package?

They have low profitability because of agent's fees.

Which of the following is true with regard to the consignment approach of selling?

Permanence

_____ refers to the impression of a long-term continuity a business gives others.