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Franchises Questions

The document contains a 10 question quiz about franchises. It tests knowledge on topics such as what a royalty is, businesses that are and aren't franchises, why franchisees can get loans, industries that use franchising, characteristics of franchisors, and advantages of starting a franchise like using a tried and tested format which lowers the risk compared to other startup methods. The questions cover definitions, examples, reasons, sectors, and statements about franchising.

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RizwanSial
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70 views3 pages

Franchises Questions

The document contains a 10 question quiz about franchises. It tests knowledge on topics such as what a royalty is, businesses that are and aren't franchises, why franchisees can get loans, industries that use franchising, characteristics of franchisors, and advantages of starting a franchise like using a tried and tested format which lowers the risk compared to other startup methods. The questions cover definitions, examples, reasons, sectors, and statements about franchising.

Uploaded by

RizwanSial
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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Franchises

Questions
1. The percentage of gross sales that a franchisee pays to the franchisor is known as a...

( )Initial investment ( )Cost of sale

( )Royalty ( )Dividend

2. Which of these businesses is NOT a franchise?

( )Molly Maid ( )Northern Rock

( )Domino's Pizza ( )Stagecoach Theatre Arts

3. Why do franchisees often find it easier to raise finance from a bank?

( )Venture capitalists will not invest in a ( )A franchise comes with a ready-made


franchise business plan

( )Franchisees tend to be better entrepreneurs ( )Banks understand the risks in lending to


popular franchises

4. Which of these businesses uses franchises to reach customers?

( )Marks and Spencer ( )Thorntons

( )Corus ( )National Health Service

5. Which statement about a franchisor is true?

( )A franchisor owns the right to sell the ( )A franchisor is a partnership


business format

( )A franchisor cannot trademark its business ( )A franchisor pays a royalty to a franchisee


format

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6. A franchisor...

( )Allows a franchisee to trade using its ( )Pays a franchisee to buy a business format
business format

( )Pays commission on sales by a franchisee ( )Provides the finance for a franchisee to set
up in business

7. Which sector of the economy of most franchises operate in?

( )Primary sector ( )Secondary sector

( )Tertiary sector ( )Public sector

8. True or false: there are around 50,000 different franchise formats in the UK

( )True ( )False

9. Which of these is an advantage of starting up as a franchise?

( )Not your own business ( )A tried and tested format

( )No need for advice or training ( )Very small investment required

10. Which of these statements is true?

( )A franchise is likely to generate over £2m in ( )Most franchises are loss-making


sales each year

( )Franchises earn higher profits than other ( )Franchises are usually a lower risk method
businesses of starting-up

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Questions
1 Royalty

2 Northern Rock

3 Banks understand the risks in lending to popular franchises

4 Thorntons

5 A franchisor owns the right to sell the business format

6 Allows a franchisee to trade using its business format

7 Tertiary sector

8 False

9 A tried and tested format

10 Franchises are usually a lower risk method of starting-up

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