Deck 11: Franchising

Question 1

Franchisors are bound to best-price requirements because of changing markets,competitors,and U.S.antitrust law.

Answer 1

False

Question 2

The value of a franchise is enhanced when the delivery of a product validates the marketing message.

Answer 2

True

Question 3

The service delivery system is the basis for a franchise venture's competitive advantage.

Answer 3

True

Question 4

In a franchise system,continuous knowledge gathering and transfer are important both before launch and on an ongoing basis.

Question 5

At the center of the Franchise Relationship Model (FRM)is the:

A) customer.
B) market.
C) contract.
D) financial structure.

Question 6

In the context of franchise marketing,"best efforts" relate to the quality and diversity of the advertising and PR support.

Question 7

The best franchisors use their field support function as a diplomatic or pejorative exercise.

Question 8

The Timmons Model identifies the three components of opportunity as market demand,market size and structure,and ____.

Question 9

Research to develop a demographic profile of the customer base does not include nonuser profiles.

Question 10

In a franchise system,a franchisor's field support is a good indicator of the stability of the franchise and strength of the franchise partnership.

Question 11

Which aspect of franchising is associated with an area of dominant influence (ADI)?

A) Finance
B) Training
C) Purchasing
D) Marketing

Question 12

Which of the following is included in a demographic profile of target customers?

A) Income
B) Phone number
C) Email address
D) Year of graduation

Question 13

Personality variables such as confidence,conservation,and independence are used to segment markets.

Question 14

Which of the following is the most valuable asset in a franchise system?

A) Tying agreement
B) Trade name
C) Product specification list
D) Transaction analysis

Question 15

Franchising is not considered a form of entrepreneurship.

Question 16

Which of the following statements is true of franchising?

A) It does not apply to international markets.
B) It does not fit within the Timmons Model of entrepreneurship.
C) It is based on partnership effort.
D) It is a small-scale growth opportunity.

Question 17

The capital outlay requirements to become a franchisee with a dominant national player are generally less than what it costs to join a regionally successful operation.

Question 18

At the most fundamental level,margin analysis is the defining quality of the opportunity recognition process.

Question 19

A franchisor is under no obligation to disclose the remuneration gained from product purchases from designated suppliers.

Question 20

Transaction analysis considers how customers purchase goods and services from franchise outlets.

Question 21

What are the three major profiles used to define the primary target audience?

Question 22

At the most fundamental level,the _____ is the defining quality of the opportunity recognition process.

Question 23

In franchising,a concept innovator is the potential ____.

Question 24

In the Franchise Relationship Model (FRM),the financial structure flows from pro forma analysis of customer demand and the cost associated with development and execution of the ____.

Question 25

The road map for marshaling resources for a franchise comes from establishing the ____.

Question 26

Discuss the three different levels at which marketing programs are funded and implemented in a franchise offering.

Question 27

A _____ profile segments potential customers based on social class,lifestyle,and personality traits.

Question 28

Describe the ideal business format of a top-ranked franchise operation.

Question 29

A(n)_____ list is a list published by a franchisor that clearly establishes the quality standards of raw materials or goods used in an operation.

Question 30

If adding suppliers to an approved list is impossible,this constitutes a de-facto _____ agreement.

Question 31

When defining the target audience,_____ variables segment potential customers by their knowledge,attitude,and use of products in order to project usage of the product or service.

Question 32

In the Franchise Relationship Model (FRM),_____ issues concern delegating responsibility to a partner.

Question 33

In the Franchise Relationship Model (FRM),franchisor functions are typically centered on ____.

Question 34

Describe the Service Delivery System (SDS)component of a franchise offering.

Question 35

A demographic profile is a compilation of personal characteristics that enables a company to define the average ____.

Question 36

What license agreement binds a franchisee to the purchase of a specifically branded product?