FRANCHISING EXAM REVIEW

The primary form of franchising we will study in this class is

Business Format Franchising

All chain outlets can be considered franchised organizations.

False

All social franchising concepts rely on franchising outlets that are non-profit.

False

Franchisees are considered employees of the franchisor and not independent business owners

False

In the US market Starbucks and Chipotle are considered franchise based organizations.

False

The primary trend today is towards single-unit franchising.

False

One historical example that used the model of franchising to grow is religious organizations

True

TRUE

-Franchise contracts favor the franchisor. -Franchise contracts restrict style and methods of operation, products and services, decor and furnishings, equipment. -Franchisees pay royalties regardless of profitability.

The following is not a benefit of being a franchisee over an independent operator.

A franchisee shares the risks with the franchisor that typically builds the store with their own capital.

NOT TRUE

Franchisees are free to expand operations by building new outlets without franchisor permission.

Which of the following is not a benefit of franchising versus owning outlets from the franchisor's perspective.

Franchisors can use national branding to attract consumers

The IFA is the

International Franchise Association

Two industries that are most associated with franchising as a primary source of distribution are

Lodging and Food Service

A master franchisee can sub franchise within a specific territory or region.

True

Atlanta is the headquarters of over 100 franchise brands/franchise brand owners.

True

Business format franchising involves licensing a business or trade style as opposed to selling a particular product.

True

A company like McDonald's that both owns and franchises outlets is called

a plural form organization