Question 1

Why is the final stage of the franchisor-franchisee relationship cycle called Decline or Development?&#10;A)the business may decline or continue to grow and prosper,and the relationship will mirror that decline or growth.&#10;B)the relationship will go through both of these stages simultaneously.&#10;C)the relationship will go through both of these phases quickly.&#10;D)independent of the direction in which the business is headed,the relationship will either decline or grow during this phase.

Accepted Answer

The final phase of a franchisor-franchisee relationship often involves the decline of the business and may lead to the franchisee seeking termination of any contractual obligations.Alternatively,in the final phase,the franchisee may develop a stronger relationship and seal the bond with the franchisor as the business continues to grow and prosper.

Question 2

The decline of industries such as the US automotive industry and the consumer electronics industry is evidence that:&#10;A)the abundance of competition is harmful to franchising in the US.&#10;B)products or services of merely average quality lose customer confidence and sales.&#10;C)customers do not like having such a wide range of products and services to choose from.&#10;D)the loss of business is usually the fault of the franchisee,not the franchisor.

Accepted Answer

Today,customers have a wide range of products and services to choose from.If the franchisor fails to deliver an acceptable product to the franchisee then the franchisee will quickly lose confidence and soon lose customers
The decline of the US automotive industry,camera industry and even consumer electronics provides widespread evidence that average quality will lose customer confidence and sales.

Question 3

The franchisor-franchisee relationship usually goes through the following cycle:&#10;A)growth,maturity,decline/development&#10;B)introduction,growth,maturity,decline/development&#10;C)introduction,growth,decline/development,maturity&#10;D)growth,decline/development,maturity

Accepted Answer

The relationship between the franchisor and the franchisee often follows the basic steps of a new business or a product life cycle: (1)introduction,(2)growth,(3)maturity,and (4)decline/development

Question 4

What can a franchisor do to enhance awareness in the franchisor-franchisee relationship?&#10;A)encourage the formation of local or regional clubs for franchisees&#10;B)offer awards or performance incentives to successful franchisees&#10;C)take periodic surveys to monitor franchisees' feelings and concerns&#10;D)all of the above

Accepted Answer

Most franchisors provide awards to show their awareness of franchisee performance levels.Some offer performance incentives,such as cash or trips,for successful franchisees.These things enhance the awareness between the franchisor and the franchisee
Franchisors should also take periodic surveys of their franchisees to learn their feelings and concerns.Also,franchisors can encourage local or regional clubs to help franchisees support each other as well as develop common advertising and marketing systems.

Question 5

How should meetings between the franchisor and franchisee evolve?&#10;A)initial meetings concentrate on specifics and eventually focus on the broader aspects of the franchise. B.initial meetings as well as follow-up meetings should all cover both general and specific information about the franchise operation.&#10;C)initial meetings hammer out the basics of the franchise operation and tackle specifics later.&#10;D)meetings should evolve according to the tastes of the individual franchisor.

Accepted Answer

The franchisor needs to provide adequate expertise to the franchisees.Most of the initial meetings are concerned with the nuts and bolts of the operation,but as the relationship matures,meetings should concentrate on specific areas such as finance,management,personal growth,marketing,and even special promotions.

Question 6

How should a FAC be developed?&#10;A)independently by the franchisor&#10;B)independently by the franchisee&#10;C)by the franchisor in cooperation with all the franchisees and corporate headquarters&#10;D)by the franchisor and franchisees only

Accepted Answer

The development of a franchise advisory council must be carefully undertaken with the cooperation of all franchisees and the corporate headquarters.It is important that all franchisees be included within the advisory council or at least have representatives on the council.

Question 7

The most common group within a Franchise Advisory Council is:&#10;A)advertising&#10;B)operations&#10;C)finance&#10;D)research and development

Accepted Answer

Probably the most common permanent group with a FAC is the advertising council.Because most franchise companies charge advertising fees in addition to their royalties,the franchisees want a say in determining how those fees are usedBy the development of an advertising council,the franchisees have an effective way to input and manage the franchisor advertising funds.

Question 8

What is the key to the Maturity stage in the franchisor-franchisee relationship?&#10;A)Expansion&#10;B)Profitability&#10;C)Communication&#10;D)Balance of power

Accepted Answer

The maturity stage of the franchisor-franchisee relationship revolves around the communication and interaction between the two principals: the franchisor and the franchisee

Question 9

Which of the following best describes the franchisor-franchisee relationship?&#10;A)steering-power/pedal-power&#10;B)superior/subordinate&#10;C)partnership&#10;D)A or C but not B

Accepted Answer

It takes both the franchisor and the franchisee to properly guide and direct a franchise system.Steering power and pedal power are equally important.The franchisor and franchisee need to learn to work together to be successful.This is not a superior-subordinate relationship.This is a partnership-like a good marriage.

Deck 19: The Franchising Relationship