Introduction to Entrepreneurship- Chapter 7: Assignment

The prospective investor should get as much information as possible on the franchisor. a. True b. False

a. True

Uniqueness in a product or service can be demonstrated through a new-new approach or a new-old approach. a. True b. False

a. True

Franchisees have the option of whether to use the logo and symbols of the franchisor. a. True b. False

b. False

Which of the following is not a key question a prospective buyer needs to ask in buying a business? a. Why is the owner selling? b. What is the owner's personal net worth? c. How many of the personnel will remain with the firm? d. What type of competition exists?

b. What is the owner's personal net worth?

Who must negotiate a final deal to purchase a business? a. A lawyer b. A CPA c. The potential buyer d. All of these

c. The potential buyer

The inventory should be examined for which of the following? a. salability b. correspondence between the physical count and the book count c. up-to-datedness d. all of these

d. all of these

An advantage to buying an ongoing business is a. reduced concern over future operations. b. time and effort are reduced. c. it may be purchased at a bargain price. d. all of these.

d. all of these.

An additional consideration to keep in mind when negotiating to purchase an existing business includes requesting that the seller retain _____ in the firm. a. a minority interest b. a majority interest c. either a minority or majority interest d. none of these

a. a minority interest

Which of the following is an entity that helps new ventures to develop by providing services such as management training and office space? a. business incubator b. business accelerators c. entrepreneurial ecosystem d. franchise

a. business incubator

The individual who buys the franchise is the a. franchisee. b. franchisor. c. franchisette. d. franchatter.

a. franchisee.

Which of the following is an intangible asset? a. goodwill b. inventory c. plant d. machinery

a. goodwill

When one designs a unique good or service, the individual is said to have used a(n) _____ approach to starting the business. a. new-new b. old-old c. old-new d. new-old

a. new-new

The person who sells the franchise is usually required to do all of the following except: a. pay a fee. b. provide professional management training to the unit's staff. c. help out with financial assistance. d. provide continuing aid and a guidance to the person buying the franchise.

a. pay a fee.

The rise of incubators, accelerators, and entrepreneurial ecosystems may be an important pathway for entrepreneurs to pursue. a. True b. False

a. True

The terms upside gain and downside loss refer to the profits the business can make and the losses it can suffer. a. True b. False

a. True

When purchasing an existing business, the prospective owner should conduct an assessment of the business's current group of employees. a. True b. False

a. True

Researchers developed a "Newness Framework" to help depict the differing dimensions of newness that ventures could exhibit, which include which of the following dimensions: a. Technology newness b. Scientific newness c. Analytical newness d. None of the above

a. Technology newness

In negotiating a deal to purchase an existing business, it is possible to request that the seller retain a minority interest in the firm. a. True b. False

a. 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. a. True b. False

a. True

The Franchise Disclosure Document (FDD) is a legally required disclosure document that must be presented to potential franchisees during presale discussions. a. True b. False

a. True

The elimination of time and effort associated with starting a company is an advantage of acquiring an ongoing venture. a. True b. False

a. True

An agreement not to compete is also known as a. a trade restriction clause. b. a legal restraint of trade. c. a waiver of competition clause. d. a deferential sale of business clause.

b. a legal restraint of trade.

When should a potential franchisee receive the FDD (Franchise Disclosure Document)? a. two days before signing a contract or paying any money b. at least ten days before signing a contract or paying any money c. two days before signing a contract d. at least ten days before paying any money

b. at least ten days before signing a contract or paying any money

The social and economic environment affecting the local and regional entrepreneurship is now commonly referred to as: a. venture incubator b. entrepreneurial ecosystem c. new venture accelerator d. venture ecology

b. entrepreneurial ecosystem

A _____ is a system of distribution that enables a supplier to arrange for a dealer to handle a specific product or service under certain mutually agreed upon conditions. a. franchisee b. franchise c. franchisor d. franchiser

b. franchise