Chapter 14- CCT

When entering a new industry through the purchase of a franchise, a small business owner should...

1. examine the industry 2. examine the potential competitors 3. examine the position relative to other new franchises

A franchisor makes money by what

1. selling franchise 2. collecting a percentage of sales 3. providing a specific training

Benefits of purchasing a franchise include...

1. the right to open a branch in a given area 2. the right to use franchisors names 3. the right to operate within the guidelines of the franchise agreement

Individuals looking to buy a franchise should

identify a franchisor that is the best potential match in support of history expansion plans

Franchisor

parent company who sells the right of the name

A franchise contains clauses

requiring purchase of supplies & displaying of marketing materials

the purchase of a well- honed thoughtfully positioned franchise can be dramatically decreased

the RISK in a starting business

Which of the following is a reason for popularity for franchising?

the franchisor can offer standard well known products that are produced by a consistent and well tested process

Franchisee

a person who buys the right to sell the product

Which of the following is a basic contract generated by the franchisor for all franchisees?

Franchise Agreement