Question 1

Which if the following was not a recommended method of evaluating the potential market for a new franchise in the text?

Accepted Answer

A)  Evaluate traffic flow in the area
B)  Hire a marketing firm to survey foot traffic near the proposed location
C)  Locate competitors and their proximity to the proposed franchise location
D)  Evaluate demographics in the areaE) B) and D)
F) B) and C)

Question 2

Which of the following would be an advantage of an acquisition?

Accepted Answer

A)  Established customer base
B)  Customer familiarity with location
C)  Existing employees
D)  Period of acquisition dealE) A) and B)
F) B) and C)

Question 3

Franchising involves payment of royalties in exchange for exclusive distribution rights.

Accepted Answer

A) True 
 B)False

Question 4

Joint ventures can involve a wide variety which include:

Accepted Answer

A)  universities.
B)  not-for-profit organizations.
C)  traditional businesses.
D)  all of the above.E) B) and D)
F) A) and C)

Question 5

The most common type of joint venture is between two or more public sector companies.

Accepted Answer

A) True 
 B)False

Question 6

Which franchise below is an example of the most popular type of franchise?

Accepted Answer

A)  KFC
B)  An automobile dealership
C)  H&R Block
D)  Real estate franchisesE) B) and C)
F) A) and B)

Question 7

Franchising opportunities have often evolved from changes in the environment as well as important social trends.This is not one of the factors responsible:

Accepted Answer

A)  good health.
B)  environmental consciousness.
C)  acceptance of different cultures.
D)  the second baby boom.E) None of the above
F) A) and C)

Question 8

Growing a venture through franchising allows the venture to expand quickly using little capital.

Accepted Answer

A) True 
 B)False

Question 9

Discuss the main advantages of an acquisition.

Accepted Answer

1.Established business.The most signific...

Question 10

Which of the following is (are) not an advantage of an international joint venture?

Accepted Answer

A)  Complimenting governmental policies.
B)  The ease of developing common business objectives.
C)  Ready access to international markets.
D)  Cultural synergy.E) A) and B)
F) A) and C)

Question 11

Which is not a strategy that is used to elicit information about the other party in a negotiation?

Accepted Answer

A)  Take up a new negotiation at the end of the first.
B)  Ask lots of questions.
C)  Make multiple offers simultaneously.
D)  Build trust and share information.E) A) and B)
F) B) and C)

Question 12

Terminating a franchise results in more lawsuits than any other issue in franchising.

Accepted Answer

A) True 
 B)False

Question 13

For the franchisor,the capital required to expand a venture quickly is more than it would be without franchising.

Accepted Answer

A) True 
 B)False

Question 14

In order to further investigate a franchise opportunity an entrepreneur can request a franchise package from the franchisor which:

Accepted Answer

A)  is usually free.
B)  costs between $400-$600 and is usually refundable.
C)  costs between $800-$1000 and is usually not refundable.
D)  contains guarantees about expected sales revenues in years 1 and 2.E) A) and D)
F) C) and D)

Question 15

Explain the potential issues that could occur in establishing an international joint venture.

Accepted Answer

The business objectives of the joint ven...

Question 16

Which of the following is not a qualitative technique an entrepreneur can use to evaluate the asking price of an LBO?

Accepted Answer

A)  The competitive position of the firm
B)  The uniqueness of the firm's offerings
C)  Price-earnings ratio
D)  The abilities of management and other key personnelE) All of the above
F) A) and B)

Question 17

A potential franchisee should seek answers to all of the following questions while assessing the financial stability of the franchisor,except:

Accepted Answer

A)  How many franchises are in the organization?
B)  Are most of the profits of the franchise a function of fees from the sale of franchises or from royalties based on profits of franchisees?
C)  What are the chances of further expansion of the company?
D)  Does the franchisor have management expertise in production,finance,and marketing?E) B) and D)
F) None of the above

Question 18

Negotiating parties will often focus on the distribution task and ignore the integration task.

Accepted Answer

A) True 
 B)False

Question 19

The most common type of joint venture is:

Accepted Answer

A)  international joint ventures.
B)  created for cooperative research.
C)  an industry-university agreement.
D)  between two or more private sector companies.E) B) and C)
F) A) and D)

Question 20

A common procedure to determine the value of a merger candidate is to estimate the present value of discounted cash flows and the expected after-tax earnings attributable to the merger.This can be done on all of the following levels except:

Accepted Answer

A)  Optimistic.
B)  Pessimistic.
C)  Probable scenarios.
D)  Logical scenarios.E) All of the above
F) A) and B)

Exam 14: Accessing Resources for Growth From External Sources

Joint ventures can involve a wide variety which include:

Correct AnswerverifiedShow Answer

In order to further investigate a franchise opportunity an entrepreneur can request a franchise package from the franchisor which:

Correct AnswerverifiedShow Answer

Franchising involves payment of royalties in exchange for exclusive distribution rights.

Correct AnswerverifiedShow Answer

Franchising opportunities have often evolved from changes in the environment as well as important social trends.This is not one of the factors responsible:

Correct AnswerverifiedShow Answer

Terminating a franchise results in more lawsuits than any other issue in franchising.

Correct AnswerverifiedShow Answer

A common procedure to determine the value of a merger candidate is to estimate the present value of discounted cash flows and the expected after-tax earnings attributable to the merger.This can be done on all of the following levels except:

Correct AnswerverifiedShow Answer

The most common type of joint venture is between two or more public sector companies.

Correct AnswerverifiedShow Answer

Which is not a strategy that is used to elicit information about the other party in a negotiation?

Correct AnswerverifiedShow Answer

Which of the following is not a qualitative technique an entrepreneur can use to evaluate the asking price of an LBO?

Correct AnswerverifiedShow Answer

The most common type of joint venture is:

Correct AnswerverifiedShow Answer

Which franchise below is an example of the most popular type of franchise?

Correct AnswerverifiedShow Answer

Discuss the main advantages of an acquisition.

Correct Answerverified1.Established business.The most signific...View AnswerShow Answer

Which if the following was not a recommended method of evaluating the potential market for a new franchise in the text?

Correct AnswerverifiedShow Answer

Growing a venture through franchising allows the venture to expand quickly using little capital.

Correct AnswerverifiedShow Answer

Explain the potential issues that could occur in establishing an international joint venture.

Correct AnswerverifiedThe business objectives of the joint ven...View AnswerShow Answer

For the franchisor,the capital required to expand a venture quickly is more than it would be without franchising.

Correct AnswerverifiedShow Answer

Which of the following would be an advantage of an acquisition?

Correct AnswerverifiedShow Answer

Which of the following is (are) not an advantage of an international joint venture?

Correct AnswerverifiedShow Answer

A potential franchisee should seek answers to all of the following questions while assessing the financial stability of the franchisor,except:

Correct AnswerverifiedShow Answer

Negotiating parties will often focus on the distribution task and ignore the integration task.

Correct AnswerverifiedShow Answer

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1.Established business.The most signific...
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The business objectives of the joint ven...
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Correct Answer
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Correct Answer
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