Small Business Management
Mock Exam
Course Introduction
Small Business Management explores the principles and practices essential to starting, operating, and growing a small business. The course covers topics such as entrepreneurial mindset, business planning, financing, marketing, operations, and human resource management tailored to the unique challenges faced by small enterprises. Students will learn how to identify business opportunities, develop effective strategies, and navigate legal, financial, and ethical considerations. Through case studies and real-world applications, this course equips students with practical tools and decision-making skills necessary for managing and sustaining a successful small business in todays dynamic marketplace.
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
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Sample Questions
Q1) Which of the following industries provides the earliest and lasting example of franchising in the U.S.economy?
A)beverage industry
B)retail fast-food industry
C)automotive industry
D)steel industry
Answer: C
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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3
Chapter 2: Recognizing Franchising Opportunities
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10 Verified Questions
10 Flashcards
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Sample Questions
Q1) A number of major questions should be addressed by a potential franchisor before choosing to expand through franchising.Which one of the following is not a major question at the onset?
A)do I have a prototype store or unit that can be replicated?
B)can my product/service meet the test of distance?
C)should I have right of first-refusal on site selection?
D)what skills will be needed by a franchisee to run my business successfully?
Answer: C
Q2) If a franchise system is struggling,not achieving long-term success.The first step for the franchisor to do is:
A)revisit and maybe change the franchisee business model
B)contact and listen to each franchisee as possible,to determine what are the problems to be addressed.
C)change the corporate business model,reduce corporate costs and reduce contact with franchisees.
D)study what the competition is doing and change the franchise model to fit the models of its primary competitors.
Answer: B
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Chapter 3: The Franchisor Business Plan
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10 Verified Questions
10 Flashcards
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Sample Questions
Q1) Which of the following is Untrue about the policies and procedures of a franchise system?
A)procedures are essentially "set in stone."
B)both policies and procedures can be abused.
C)policies serve as guidelines for employee actions.
D)procedures identify the steps or elements within a process that are considered appropriate for performing assigned tasks.
Answer: A
Q2) What are the four main areas of taxation one must consider when reporting about a franchise's activity?
A)sales taxes,business taxes,property taxes,employee taxes
B)sales taxes,property taxes,employee taxes,franchisor taxes
C)sales taxes,property taxes,employee taxes,franchisee taxes
D)sales taxes,property taxes,franchisor taxes,franchisee taxes
Answer: A
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Chapter
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Sample Questions
Q1) There are four types of growth opportunities for franchise systems to increase sales and share-of-market within their customer base.Which one below is not one of these tried-and-true approaches for growth?
A)Retain existing customers.
B)Stimulate more purchase within your existing customer base.
C)Offer new products/services in new territories to new customers
D)Cross-sell complementary products/services that meet new or a different combination of existing customer needs.
Q2) Entrepreneurs tend to work harder and take moderately greater risks than persons working as employees in someone else's firm.Traits that entrepreneurs tend to have include all but which one of the following?
A)High motivation to achieve
B)Apathy about life
C)Self-confidence
D)Being adventurous
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Chapter 5: The Franchise Marketing Process
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11 Verified Questions
11 Flashcards
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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) According to the U.S.Census,( )are the fastest growing segment of small business ownership today.
A)immigrant entrepreneurs
B)Mompreneurs
C)Gen-Yers
D)Baby Boomers
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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Chapter 6: Selling Franchises and Marketing Research
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10 Verified Questions
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Sample Questions
Q1) What is the key to convincing someone to purchase your franchise,product,or service?
A)features
B)personality
C)experience
D)benefits
Q2) What is a realistic number for a sample size when doing market research?
A)50
B)300
C)500
D)1,000
Q3) How much of successful selling consists in simply listening to the prospective buyer?
A)5%
B)25%
C)50%
D)80%
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Chapter 7: Co-Branding
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5 Verified Questions
5 Flashcards
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Sample Questions
Q1) 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.
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) 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
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Chapter 8: Managing the Franchisors Operations Process
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10 Verified Questions
10 Flashcards
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Sample Questions
Q1) The general purpose of a promotions package by the franchisor to potential franchisees is to:
A)solicit and sign franchisees
B)inform potential franchisees about the business in general terms only
C)learn as much about potential franchisees while sharing limited brochure materials about the franchise system,
D)none of the above
Q2) Though a location manual or policy may be developed to assist in determining optimal sites,for franchised businesses that require a store-front location the final determination often rests with:
A)the bank that loans the funds for construction of the store
B)the franchisee
C)the franchisor
D)the city's zoning commission
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Chapter 9: Location and Site Selection
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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) Adequate frontage is a necessity for most retail businesses.What amount is generally considered adequate?
A)50-100 feet
B)100-200 feet
C)200-400 feet
D)400 feet or more
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:
Presentation and Uses
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Sample Questions
Q1) How often should financial accounting information be reviewed by management?
A)monthly
B)every fiscal quarter
C)every six months
D)annually
Q2) Which of the following types of financial ratios measures the ability of the franchise organization to turn sales into profits?
A)activity
B)market
C)profitability
D)coverage/leverage
Q3) What is the purpose of ratio analyses of financial statements?
A)to gauge the franchise's profit potential
B)to asses the franchisor or franchisee's management skills
C)to determine the success of the franchise in meeting its overall objectives
D)to measure the exact worth of a franchise
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Chapter 11: Financial Management and Fiscal Planning
Tools and Techniques
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Sample Questions
Q1) The income statement is used to plan:
A)liquidity for the firm
B)profitability for the firm
C)anticipated costs of operation
D)asset utilization for the business
Q2) Estimation of sales and other income for a period and cash disbursements to be paid in the same period identifies the components of the:
A)balance sheet
B)income statement
C)cash flow statement
D)none of the above.
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
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Sample Questions
Q1) Which of the following helps to simplify the difficult site selection process?
A)value-cost-risk procedures
B)working knowledge profiles
C)data analyses
D)all of the above
Q2) Which of the following is NOT an element of virtual relationship management in e-business strategy?
A)collaboration with suppliers through Internet
B)collaboration with suppliers through Extranet
C)collaboration with consumers through Internet
D)intra-enterprise collaboration through Intranet
Q3) 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
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Chapter 13: Franchise Legal Documents
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5 Verified Questions
5 Flashcards
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Sample Questions
Q1) 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
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) Why do most franchisors use the UFOC format for disclosure?
A)not all states accept the FTC rule format.
B)the UFOC covers more ground than the FTC rule format.
C)the FTC rule format covers more ground and is more complicated to use.
D)the UFOC is accepted in more registration states than the FTC rule format.
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Page 15
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Sample Questions
Q1) Which of these qualities makes for the strongest kind of trademark or service mark?
A)availability
B)descriptiveness
C)originality
D)distinctiveness
Q2) Which of the following is a protectable property right granted by the government that protects an invention,new device,or innovation?
A)patent
B)copyright
C)trade secret
D)trademark
Q3) Which of the following is a property right provided by the government in an original work of author?ship that is fixed in a tangible form?
A)service mark
B)trade secret
C)copyright
D)trademark
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Page 16
Chapter 15: Investigating Franchise Opportunities
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10 Verified Questions
10 Flashcards
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Sample Questions
Q1) Rule 436 is a rule issued by ( )provides franchisors and franchisees with certain legal rights under federal law.
A)Interstate Commerce Commission
B)Department of Commerce
C)Federal Trade Commission
D)U.S.Small Business Administration
Q2) 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
Q3) Over the counter business-oriented publications often include franchise-related information.Each of the following publications regularly provide such useful franchise information except for
A)Wall street Journal
B)U.S.A.Today
C)Women's Home Journal
D)Entrepreneur Magazine
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17
Chapter 16: Financing Your Franchised Business
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Sample Questions
Q1) When its time to sell or retire,most franchisors will cooperate with the franchisee intent to exit
A)but are not usually interested in helping the franchisee find a buyer for the business
B)other franchisees are not likely to among those persons with intent or interest to purchase another franchise unit
C)and will stand aside to allow the franchisee to sell to whomever is found as a buyer of the business
D)none of the above is an accurate statement
Q2) The executive summary part of the financial package
A)details how the business intends to generate its profit through the descriptions of products or services offered by the franchisee
B)explains the business,and sparks the interest of the reader in how the funds will be used
C)enumerates all expenses necessary before the first customer enters the door
D)focuses on the franchising agreement between franchisor and franchisee so the reader understands all contracts,licenses and other legal requirements of the business.
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Chapter 17: Marketing the Franchisee Business
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8 Verified Questions
8 Flashcards
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Sample Questions
Q1) Which of the following questions is least important as a major critical issue for a new franchisor?
A)what is the target market for my product/service?
B)how should I price the products in my product line?
C)what guarantees,warranties or services should be provided to the customer?
D)who shall I hire as my secretary?
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
Q3) Casual dining places have,generally,targeted which group as their primary customer group?
A)children between ages 2-10
B)senior citizens with disabilities
C)college freshmen
D)adults of all ages
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Chapter 18: Managing the Franchisee Business Stage Six:
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Sample Questions
Q1) Among the actions a franchisor may not engage in the following except:
A)requiring a franchisee to buy a product(s)in order to acquire the product the franchisee wants to purchase
B)mandating the price / a franchisee must charge customers for a product
C)promote a nation-wide sales promotion for products/services sold by franchisees
D)only provide sales and financial projections in a more understandable format than that provided for by the FTC Earnings Claim Document
Q2) Which of the following does not shape the management philosophy of top management in a franchise system according to the text?
A)the level of profits of the franchise system
B)the values and experiences of the owners
C)economic influences
D)technological influences
Q3) Family-owned and/or controlled businesses
A)usually continue to exist over two and sometimes three generations
B)usually succeeds ten or more years
C)account for a clear majority of all incorporated firms in the United States
D)generate more than 80% of U.S.GDP
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Chapter 19: The Franchising Relationship
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Sample Questions
Q1) What is the key to the Maturity stage in the franchisor-franchisee relationship?
A)Expansion
B)Profitability
C)Communication
D)Balance of power
Q2) Why is the final stage of the franchisor-franchisee relationship cycle called Decline or Development?
A)the business may decline or continue to grow and prosper,and the relationship will mirror that decline or growth.
B)the relationship will go through both of these stages simultaneously.
C)the relationship will go through both of these phases quickly.
D)independent of the direction in which the business is headed,the relationship will either decline or grow during this phase.
Q3) The most common group within a Franchise Advisory Council is:
A)advertising
B)operations
C)finance
D)research and development
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21
Chapter 20: Franchiser Support Services Stage Seven: Current Issues in Franchising
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Sample Questions
Q1) 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
Q2) 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
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
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Sample Questions
Q1) 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
Q2) Examples of ethical issues in marketing include all the following except:
A)the franchisor requires the franchise to purchase low moving products in order to receive ship of other "hot" products
B)reducing the size of a product package,the contents of the package and adjusting the price of the product to reflect the new (smaller)size.
C)representing a product as "the most current model" when in fact a newer model is available
D)the franchisor launches a system-wide advertising campaign for a product and mandates the price franchisees must charge for the advertised product.
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23
Chapter 22: International Franchising
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10 Verified Questions
10 Flashcards
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Sample Questions
Q1) 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
Q2) The largest U.S.franchise restaurant system in China is
A)McDonald's
B)KFC
C)Wendy's
D)Burger King
Q3) The most common restrictions levied by a government in international trade are?
A)quotas
B)tariffs
C)embargo
D)exchange controls
Q4) The future for international franchising is:
A)bright and promising
B)promising,but uncertain
C)difficult,but rewarding
D)yet to be determined
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