Business 5

The most popular businesses for franchising are ____.

restaurants

An advantage of a sole proprietorship is that the owner ______.

retains profits

_____ of company profits is considered an advantage of a sole proprietorship

retention

Which of following are true about the advantages and disadvantages of being a franchise owner

- Having a nationally recognized name for your business in a franchise can help with marketing and awareness - While the upfront costs of a franchise may be steep, a franchise has a better chance of succeeding than starting a business from scratch

It is easy to start and end a sole proprietorship because:

- it may only require a simple permit or license to start, only one person Is involved In decision to dissolve the business

What are some of the disadvantages of operating a franchise?

1) large start-up costs 2)Restrictions on selling 3) shared profit

Funds available to a business are limited to what one owner can gather which is a disadvantage to the form of business known as a(n) _________ __________.

Blank 1: sole Blank 2: proprietorship

A business person concerned about high ____ costs should not invest in a franchise which is associated with this disadvantage.

Blank 1: startup, initial, start-up, or starting

A franchise business owner is still their own _______, though they must follow more rules, regulations, and procedures.

Boss

A franchisee must know the amount of the franchising ______ for the rights to start the franchise.

Costs

Being your own boss is a disadvantage of a sole proprietorship.

False

It is not important to know how long a franchisor has been in operation.

False

What are three advantages of franchising?

Financial advice Lower failure rate Recognized name

A nationally established franchise provides a franchisee with a ______ that is recognized by consumers, and therefore, saves on marketing costs.

Name

The three major forms of business most common in the United States are ______.

Sole proprietorships, corporations, and partnerships

A disadvantage of a sole proprietorship is limited financial resources.

True

The main advantage of a sole proprietorship is ease of start up.

True

The owner of a sole proprietorship is responsible for developing any fringe benefits they have.

True

To end a sole proprietorship, you simply stop operations.

True

A franchise owner will experience the coattail effect when ______.

a fellow franchisee does something that has an impact on growth and profitability

A corporation is defined as ______.

a legal entity with authority to act apart from its owners a chartered legal entity with authority to act apart from its owners

In a franchise, having management support from the franchisor is a(n) ______ whereas the coattail effect is considered a _____.

advantage/disadvantage

What advantage of being a sole proprietor gives the business owner satisfaction from being able to make their own decisions—even if the decisions made turn out to be a mistake?

being your own boss

Many people do not like working for someone, so being your own ____ is an advantage of sole proprietorships

boss

When the actions of others with the same franchise as yours have an impact on your future growth and profitability, this is an example of _____ effects.

coattail

Because of the poor publicity at a fellow franchise location, you notice that sales at your location have decreased. The impact of the poor publicity on your company is referred to as

coattail effect

When the actions of other franchises have an affect on your business operation, this is called:

coattail effects

A key advantage of a sole proprietorship is that ______.

controlling your own business is exciting

A ______ is owned by its members, the people who use it, versus a corporation which is owned by people who own stock.

cooperative

A business owned and controlled through pooled resources by the people who use it is a(n) ______.

cooperative

Being owned by those using the products of a firm rather than simply being a shareholder is what makes a _____ unique.

cooperative

When farmers join together to get better prices for their food products, they form a farm _____.

cooperative

When producers, consumers, or workers with similar needs pool their resources for mutual gain, they start a(n) ______.

cooperative

A legal entity with authority to act and have liability apart from its owners is a ______.

corporation

A(n) __________ is a chartered legal entity with authority to act and have liability separate from its owners.

corporation

Sole proprietorships far outnumber ______ and _____, but they net far fewer sales and less income.

corporations and partnerships

Franchises are important to the ______ because of the number of new businesses started and jobs created.

economy

There is little room for advancement with a sole proprietorship, so the owner may have difficulty attracting and retaining qualified ______.

employees

Historically, the ______ rate for franchises has been lower than that of other business ventures.

failure

The initial goal of a(n) ______ cooperative was to join together to get better prices for their food products.

farm

Select the most popular businesses for franchising.

fast food restaurants full service restaurants gas stations with convenience stores

A disadvantage of franchises is that most demand a ____ from the franchisee for the right to start the franchise.

fee

A disadvantage of franchises is that most demand a ______ from the franchisee for the right to start the franchise.

fee

One of the most important advantages of the sole proprietor form of ownership is that a business owner ______.

finds it easier to start and end the business

A business person concerned about startup costs of a business opportunity should consider a venture other than a(n) ______ which has this disadvantage.

franchise

An agreement that gives a business the right to use a business's name and sell a product or service in a given area is a(n) ______.

franchise

An entrepreneur would buy a ______ if they are uncomfortable starting their business from scratch.

franchise

An investor concerned about failure should consider purchasing a(n) _______ due to the lower failure rate as compared to other business ventures.

franchise

Financial advice and a nationally recognized name are both benefits of owning a(n) ______.

franchise

Many minority business owners prefer the ______ form of business ownership because it offers business connections and support.

franchise

A franchise operation is still your business, but you must follow the rules of ______.

franchise agreement

Franchisors often use technology to meet the needs of both their customers and their _____ because technology makes communication faster and more widespread.

franchisees

Businesses that are ______, like McDonald's, have both a direct and indirect impact on the economy through job creation and spending.

franchises

A ______ tends to demand a large share of the profits from the franchise which is considered a disadvantage for the franchisee.

franchisor

Franchisees can begin to feel burdened if the ______ creates too many managerial orders, directives or limitations.

franchisor

If you are your own boss, you are responsible for paying your own wages/salary and for your own _________ ______.

fringe benefits

Relief from the stress of commuting, extra time for family activities, and low overhead expenses are all advantages of _______ - _______ franchises.

home-based

An entrepreneur could choose to buy a franchise because:

it can be started as a sole proprietorship, partnership, or corporation it's a business brand with a proven track record it is less stressful than starting a business from scratch

A sole proprietorship has a limited life span unless ______.

it is sold to someone else it is taken over by an heir

Franchises not only help many entrepreneurs start a business but also create many new __________.

jobs

Leaving a ____ means owners can leave an ongoing business for future generations.

legacy

When a sole proprietor leaves an ongoing business to future generations, it is said that the owner is leaving a ______.

legacy

If the sole proprietor dies, is incapacitated, or retires, the business no longer exists. This disadvantage of a sole proprietorship is called ____ life span.

limited

When the continued operation of the business is dependent on the life of the business owner, it is referred to as ______.

limited life span

Franchises offer those starting a business the advantage of a recognized name, management assistance, and ______.

lower failure rates

Franchises are expanding internationally to access additional ______ that have new customers and to increase their profit potential.

markets

Amy wants to start a business but is concerned with starting from scratch without much business experience. To alleviate her concern Amy could ______.

obtain a franchise

A key advantage of a home-based franchise is low ______ costs, which can be ongoing. These are the costs associated with rent, utilities, and other fixed costs.

overhead

Sole proprietorships have fewer financial resources since they are limited to what the ____ is able to borrow.

owner or proprietor

A legal form of business with two or more owners is a(n) ______.

partnership

When two or more people legally agree to become co-owners of a business, the organization is called a(n) ______.

partnership

A disadvantage of buying a franchise is ______.

paying a share of profits as royalties

Unlimited liability as it relates to sole proprietorships is the risk of loss of _______ assets beyond the assets of the business.

personal

An advantage of a sole proprietorship is the business owner keeps all the _____, but in a franchise, in many instances, this must be shared with the franchisor.

profits

With an established franchise, you get instant ______ and support for your product from customers around the world.

recognition

If you start and manage a landscaping business on your own, you have likely started a ______.

sole proprietorship

The easiest type of business entity to form is a

sole proprietorship

The three major forms of business most common in the United States are______.

sole proprietorships. partnerships. corporations.

What are two reasons that franchises are attractive to minority populations?

some offer financial support to aspiring business owners they provide personal ownership of a business

The large ________ costs for the rights to a franchise can vary from a few thousand to millions of dollars.

startup

Gathering leads on a company website, selling products and keeping up to date on news via email, and chat rooms all serve as examples of using ________ to assist franchisees and customers.

technology

What two items are delineated in a franchise agreement?

the right to sell a business' products in a given territory the right to use a specific business' name

Many franchises are expanding internationally because ______.

there are large new markets available

It is often more difficult for sole proprietorships to attract and retain good employees because ______.

they cannot offer competitive pay and benefits

In order to protect the brand name and image, the franchisor often has:

tight management controls high standards required marketing programs

The responsibility of the owner of a sole proprietorship for all of the debts of the business is ______ liability.

unlimited

When you own a sole proprietorship you and the business are considered one, so you have _____ liability for financial obligations such as debt.

unlimited

A key disadvantage of operating a sole proprietorship is:

unlimited liability

If your company's debts or damages are solely your responsibility you could be experiencing the disadvantage associated with owning a sole proprietorship called _____ ______.

unlimited liability

In a sole proprietorship, any debts or damages incurred by the business are your personal debts and you must pay them. This disadvantage is known as ______.

unlimited liability

Many brick and mortar franchisees are using ______ to expand their businesses online to lower costs and better meet the needs of their customers

websites technology

Funds available for a sole proprietorship are limited to ______.

what the owner can provide