Franchising Management Exam Practice Tests
Course Introduction
Franchising Management explores the principles, practices, and strategies behind the operation and growth of franchise businesses. The course covers the fundamentals of franchising, including the legal frameworks, business models, and contractual relationships between franchisors and franchisees. Students examine site selection, brand consistency, marketing, financial oversight, and operational control unique to franchised businesses. Through case studies and real-world examples, learners analyze the benefits and challenges of franchising from both perspectives, gain insight into issues such as conflict resolution and international expansion, and develop skills to effectively create, manage, or evaluate a franchise system.
Recommended Textbook
Franchising 4th Edition by Richard J. Judd
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22 Chapters
209 Verified Questions
209 Flashcards
Source URL: https://quizplus.com/study-set/1324 Page 2
Chapter 1: Franchising: History and Overview
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10 Verified Questions
10 Flashcards
Source URL: https://quizplus.com/quiz/26381
Sample Questions
Q1) Probably the earliest example of franchising in the United States is most likely to be:
A)Kentucky Fried Chicken
B)McDonald's
C)Western Auto
D)McCormick Harvesting Machine Company
Answer: D
Q2) The business arrangement,otherwise called a franchise opportunity,has three major components that constitute the essence of what is generally referred to as a franchise.Which one of the following is not part of a franchise business arrangement?
A)use of product or service
B)use of private labels to brand or trademark product or service
C)a franchisor's trademark and/or logo
D)payment of a royalty fee
Answer: B
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Chapter 2: Recognizing Franchising Opportunities
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10 Verified Questions
10 Flashcards
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Sample Questions
Q1) Which one of the following is NOT an advantage of franchising for the franchisee?
A)established product or service
B)technical and managerial assistance
C)quality control standards
D)expansion
Answer: D
Q2) There are several ways to protect a trademark,as indicated below.Which descriptive statement is NOT one of the legal ways of protecting a trademark?
A)coined trademark
B)descriptive trademark
C)suggestive trademark
D)trouble-free trademark
Answer: D
Q3) Which of the following is a disadvantage for the franchisor?
A)franchisee motivation
B)bulk purchasing
C)loss of freedom and control as franchise system grows
D)use of capital for reasons other than expansion
Answer: C
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Page 4
Chapter 3: The Franchisor Business Plan
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10 Verified Questions
10 Flashcards
Source URL: https://quizplus.com/quiz/26383
Sample Questions
Q1) What is the first step to good site selection?
A)examining a number of sites in terms of their "need" and forecasting demand
B)determining markets in a geographical area with suitable customer demographics
C)selecting the market area with the best combination of demographics in the area
D)determining the appropriate building size and layout
Answer: B
Q2) The two main reasons for failure in business are:
A)lack of capital and poorly chosen location
B)poorly chosen location and inadequate business plan
C)poor management and lack of capital
D)inadequate business plan and poor management
Answer: C
Q3) The most important section of the business plan is:
A)The Management Segment
B)The Executive Summary
C)The Marketing Segment
D)The Legal Requirements
Answer: B
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5
Chapter 4: Franchisor Management, Organization and Administrative Policy
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10 Verified Questions
10 Flashcards
Source URL: https://quizplus.com/quiz/26384
Sample Questions
Q1) Considering the processes of management for a the franchise system,overall planning of the firm for today's operations and the future of the system itself is the primary responsibility of
A)the owner/management.
B)franchisees
C)franchisor field staff
D)prospective franchises being recruited into the system
Q2) To properly develop a franchise system the franchisor must develop the franchise system at three different levels.Which one of the following is not one of the levels for development?
A)Operations/operational
B)Administrative
C)Home office interior design
D)Strategic
Q3) One who owns and operates more than one franchise unit is known as a A)Area Developer
B)Master Franchisee
C)Multi-unit Franchisee
D)Franchise Broker
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Chapter 5: The Franchise Marketing Process
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11 Verified Questions
11 Flashcards
Source URL: https://quizplus.com/quiz/26385
Sample Questions
Q1) There are four generic categories to classify goods and services.Which one below fits the description of----goods or services that are frequently purchased,usually are low-to- competitively priced,and staples,emergency or impulse buys.
A)convenience goods or services
B)homogeneous shopping goods or services
C)heterogeneous shopping goods or services
D)specialty products or services.
Q2) Why would a franchise system monitor its external environment?
A)to identify factors which may pose major threats to or provide significant opportunities for the franchise system.
B)to develop a set of objectives to fit the mission and overall goals of the franchise system.
C)to concentrate resources outside of the firm more than inside of the firm.
D)to second-guess what its suppliers intend to do next.
Q3) Which one of the following is Not one of the "Four P's" in marketing?
A)product
B)process
C)price
D)promotion
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Page 7
Chapter 6: Selling Franchises and Marketing Research
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10 Verified Questions
10 Flashcards
Source URL: https://quizplus.com/quiz/26386
Sample Questions
Q1) Which of the following is NOT one of the four P's of selling?
A)power
B)pleasure
C)profit
D)practice
Q2) Why do most franchisees choose to go into business with a franchised company?
A)a successful franchising operation would satisfy some of their wants and desires.
B)they have finally decided to try something "on my own."
C)they are seeking a change in their life.
D)all of the above.
Q3) Which of the following is true about the serious prospective franchisee?
A)he/she is not looking to start the franchise as soon as possible.
B)he/she is very straightforward about his/her interest,availability,and financial resources.
C)he/she is cautious about disclosing his/her intentions.
D)his/her time frame generally increases as his/her interest level increases.
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8
Chapter 7: Co-Branding
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5 Verified Questions
5 Flashcards
Source URL: https://quizplus.com/quiz/26387
Sample Questions
Q1) What crucial element is necessary for the success of co-branding partners?
A)sufficient time to integrate the brands
B)natural synergy between the brands
C)distinctive differences between the brands
D)a strong personal relationship between the franchisors
Q2) Which of the following is true about co-branding?
A)it is primarily franchisor-driven.
B)it is primarily customer-driven.
C)it is primarily franchisee-driven.
D)it can be either franchisor- or franchisee-driven.
Q3) Why might co-branding be beneficial for a mature market?
A)mature markets provide little opportunity for sales and profit growth through traditional outlets.
B)co-branding represents a new approach that can revitalize mature markets.
C)a new and improved,co-branded unit has the potential to bring in extra cash flow that can result in greater overall new profits for the franchise system.
D)all of these are reasons it could be beneficial.
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Chapter 8: Managing the Franchisors Operations Process
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10 Verified Questions
10 Flashcards
Source URL: https://quizplus.com/quiz/26388
Sample Questions
Q1) There is one thing every franchise system knows.If you don't know how you want to be positioned in the marketplace,and don't know the value propositions you uphold,then you will be:
A)ahead of all other competitive franchise systems operating in your market area
B)positioned in the market-place and educated on that position by your competition
C)provided sufficient time to determine these factors for yourself within the first 3-5 years of business
D)grateful for the freedom provided by the franchisor for you to "do your own thing."
Q2) Which type of franchisor program offered to franchisees is based on the general notion that new franchisees have little or no specific business knowledge about the franchise system?
A)marketing manual
B)reporting manual (including appropriate financial forms)
C)training manual
D)operating (or operations)manual
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Chapter 9: Location and Site Selection
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10 Verified Questions
10 Flashcards
Source URL: https://quizplus.com/quiz/26389
Sample Questions
Q1) Which of the following types of businesses benefit from being located near competitors?
A)unique business
B)comparative business
C)competitive business
D)none of these types benefits from being located near competitors.
Q2) Four factors are important in determining the size and shape of a primary service area (PSA).These include all of the following EXCEPT:
A)BPI
B)alternative shopping choices
C)intuition
D)drive-time analysis
Q3) Which two concepts receive primary consideration when determining store layout?
A)customer traffic and employee traffic
B)attractive décor and effective lighting
C)customer traffic and attractive décor
D)effective lighting and overall attractive atmosphere
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11
Chapter 10: Accounting and Financial Statements:
and Uses
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Sample Questions
Q1) What do financial ratios analyze?
A)the "bottom line"
B)the return to the franchised business owner
C)the "net" profit
D)all of the above
Q2) Which of the following processes involves interpreting a relationship between two financial figures?
A)accounting
B)ratio analysis
C)ledgering
D)cash flow
Q3) How often should financial accounting information be reviewed by management?
A)monthly
B)every fiscal quarter
C)every six months
D)annually
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Chapter 11: Financial Management and Fiscal Planning
Tools and Techniques
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10 Verified Questions
10 Flashcards
Source URL: https://quizplus.com/quiz/26391
Sample Questions
Q1) To fund a franchise business,most franchisee use:
A)a single source of funding
B)multiple sources of funding
C)already have sufficient liquidity to fund the startup and need no additional funding
D)none of the above
Q2) In financial planning with the franchised business,the most basic and essential variable of the financial planning tools is the:
A)inventory schedule
B)sales forecast
C)pro forma balance sheet
D)econometric models for forecasting liabilities
Q3) "Pro forma" accounting statements as used in business financial planning means:
A)actual accounting of income and expenses
B)actual accounting of assets and liabilities
C)a statement of anticipated costs and revenues or change in assets,liabilities and equity based upon prior (operating)financial performance.
D)none of the above
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Page 13
Chapter 12: Information Systems in Franchising
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10 Verified Questions
10 Flashcards
Source URL: https://quizplus.com/quiz/26392
Sample Questions
Q1) Which of the following activities at the franchised unit should be the center of attention?
A)making sales to customers
B)managing people who make sales to customers
C)dealing with financial issues such as accounting and finances
D)marketing and advertising to customers
Q2) What is the primary purpose of information systems in a start-up franchise?
A)to improve operations at franchised units
B)to improve operations at franchisor's headquarters
C)to generate data which can be used to accumulate working knowledge
D)to leverage working knowledge and increase profits
Q3) The information contained in the daily business intelligence reports becomes the foundation upon which a franchise system builds what?
A)experience
B)working knowledge profiles
C)reliability
D)target markets
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Chapter 13: Franchise Legal Documents
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5 Verified Questions
5 Flashcards
Source URL: https://quizplus.com/quiz/26393
Sample Questions
Q1) What sort of disclosure document is required by the FTC Rule?
A)the format prescribed by the FTC
B)the UFOC,or uniform franchise offering circular
C)both of the above formats
D)one of the above formats
Q2) Which of the following is NOT true about the Franchise Agreement?
A)most of its components are the subject of specific disclosure under the FTC rule.
B)it is generally a static,unchanging document.
C)it is useful for a broad spectrum of businesses.
D)it has evolved as a result of the way franchising has come to be regulated by state and federal laws.
Q3) Which of the following allows a developer to build a num?ber of franchised businesses in a particular market area?
A)Franchise Agreement
B)Sub-Franchising Contract
C)Area Development Agreement
D)UFOC
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15
Chapter
Five: the Franchisee
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Sample Questions
Q1) Which of the following does the trademark most often represent?
A)the source of a product
B)the name of a product
C)a standard of quality
D)a protectable property right
Q2) Which of the following is a word,name,phrase,symbol,or design that is used by a manufacturer or merchant to identify and distinguish its goods from those sold by others?
A)copyright
B)trademark
C)service mark
D)patent
Q3) What element of the Sherman Act does the Rule of Reason help the courts enforce?
A)prohibition of tying arrangements
B)prohibition of unfair competition
C)prohibition of any contract which restrains trade
D)prohibition of contracts and conspiracies that unreasonably restrain trade
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Page 16
Chapter 15: Investigating Franchise Opportunities
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10 Verified Questions
10 Flashcards
Source URL: https://quizplus.com/quiz/26395
Sample Questions
Q1) Almost all franchising agreements are set up for a specified term,generally from
A)five to twenty years
B)one to six years
C)twenty to forty years
D)ten to thirty years
Q2) The Disclosure Document in franchising means the same as:
A)Uniform Franchise Offering Circular
B)"Rule 245" of the Sherman Anti-Trust Act
C)the Walsh-Healy Act of 1970
D)the commitment to no "tying" agreements between franchise systems.
Q3) For a new franchisee joining a solid franchise system
A)much of the guesswork of running a business is removed.
B)most of the mistakes made by an independent entrepreneur will be experienced
C)the new franchisee is yet to learn and resolve all the "kinks" of running a business
D)all of the above are true
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Chapter 16: Financing Your Franchised Business
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Sample Questions
Q1) The "initial franchise fee" is
A)a one-time cost or fee born by the new franchisee
B)a recurring cost or fee,every three or five years
C)a one-time fee that is most often waived by the franchisor
D)none of the above
Q2) Preparing a financial package by a franchisee is meant to assist in the generation of equity investment or debt backing for the startup and operation of the business venture.When preparing the financial package for presentation,the first parties to consider when writing the financial package should be:
A)the franchisor
B)other franchisees of the same franchise system
C)the area developer or Director of Franchising for the franchise system
D)the local bank,loan office or investor to understand the operations,functions and potential profitability of the franchise.
Q3) The franchisee's major financial obligation is to:
A)the Internal Revenue Service
B)one's State Department of Revenue
C)City or County health department
D)the franchisor
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Page 18
Chapter 17: Marketing the Franchisee Business
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8 Verified Questions
8 Flashcards
Source URL: https://quizplus.com/quiz/26397
Sample Questions
Q1) A market can be defined by four of the following means.Which one below is not considered as a primary means to define a market?
A)type of product/service offered
B)robot-analyzed menu choices based upon on-site traffic
C)customer characteristics
D)geography
E)specific location
Q2) Potential customers can be grouped into market segments in different ways as based upon any one-up-to-four---of the following factors.Which one factor below is not a means to development market segmentation?
A)demographic factors
B)behavioral factors
C)writing style factors
D)psychographic factors
E)geographic factors
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Chapter 18: Managing the Franchisee Business Stage Six:
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Sample Questions
Q1) Which of the following is not typically a franchisee "right" granted in the written franchising agreement?
A)right to transfer or sell the business
B)right to relocate within a designated sales area
C)right to develop and sell new products or services
D)fair and equitable performance standards
Q2) Typically the inequality of bargaining power between franchisor's and franchisees
A)favors the franchisee
B)favors the franchisor
C)is mitigated by financial resources of the franchisee
D)is a myth
Q3) As stated in the text,all of these items are among the ten most common legal problems of franchisees except:
A)sharing advertising costs
B)minimum performance requirements
C)fees for support services
D)correct information being provided to the IRS
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Page 20
Chapter 19: The Franchising Relationship
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9 Verified Questions
9 Flashcards
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Sample Questions
Q1) What can a franchisor do to enhance awareness in the franchisor-franchisee relationship?
A)encourage the formation of local or regional clubs for franchisees
B)offer awards or performance incentives to successful franchisees
C)take periodic surveys to monitor franchisees' feelings and concerns
D)all of the above
Q2) Which of the following best describes the franchisor-franchisee relationship?
A)steering-power/pedal-power
B)superior/subordinate
C)partnership
D)A or C but not B
Q3) The franchisor-franchisee relationship usually goes through the following cycle:
A)growth,maturity,decline/development
B)introduction,growth,maturity,decline/development
C)introduction,growth,decline/development,maturity
D)growth,decline/development,maturity
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Chapter 20: Franchiser Support Services Stage Seven: Current Issues in Franchising
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Sample Questions
Q1) What is required of the person in charge of a franchisee training program?
A)experience as a franchisor
B)understanding of the needs of the particular franchised business
C)knowledge about the training process
D)both b and c
Q2) Which of the following is the most compelling reason for someone to seek a franchise opportunity?
A)the chance to be self-employed
B)profitability
C)the opportunity to enjoy growth in the franchise
D)pressure from the franchisor
Q3) What is the greatest support for a franchisee?
A)a good training manual
B)lots of start-up capital
C)the opportunity for success
D)frequent contact with field representatives
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22
Chapter 21: Social Responsibility and Business Ethics
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11 Verified Questions
11 Flashcards
Source URL: https://quizplus.com/quiz/26401
Sample Questions
Q1) Which of the following is not an appropriate question to identify ethical factors in a decision-making situation?
A)is the action being considered illegal?
B)have all points of view been considered?
C)what are the short-term and long-term consequences of the decision and action?
D)how will I feel if a story about this action appears on the front page of the local newspaper available to the general public?
Q2) Business ethics
A)only involves moral values
B)only involves establishing behavioral standards
C)ultimately is about decision-making
D)only involves determination of right and wrong
Q3) Which of the following is NOT an argument for businesses to be socially responsible:
A)to create a positive public image for the business
B)to discourage further government regulations
C)social responsibility is a core business purpose
D)to enhance stock price of the firm in the long run
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23
Chapter 22: International Franchising
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10 Verified Questions
10 Flashcards
Source URL: https://quizplus.com/quiz/26402
Sample Questions
Q1) The least favorite method of entering foreign markets is by investing in company-owned stores in foreign countries and this is called?
A)licensing
B)joint venture
C)direct investment
D)master franchising
Q2) Probably the main hindrance with expanding into foreign markets is:
A)high costs
B)government red tape
C)labor supply
D)lack of master franchisees
Q3) One of the very few companies that has been successful in using the exact same product world-wide is:
A)Coca-Cola
B)McDonald's
C)Dairy Queen
D)Marriott Hotels
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