Deck 8: The Franchise Alternative: How Do I Buy a Franchise

Question 1

Siblings close in age and of the same gender are more likely to continue rivalries into adulthood.

Answer 1

True

Question 2

The key advisors for a retiring business owner are:

A) consultant, lawyer, doctor, insurance agent.
B) financial planner, doctor, real estate agent, lawyer.
C) accountant, financial planner, lawyer, personal advisor.
D) lawyer, doctor, accountant, estate planner.

Answer 2

C

Question 3

Which of the following is a family business?

A) A woman owns a small garage where her four sons work as mechanics.
B) A man owns a delivery service where the five children of his dispatcher work.
C) A woman is self-employed as a writer and is the only earner in her family.
D) None of the above are family businesses.

Answer 3

A

Question 4

There are no formal educational requirements for taking over a family business.

Question 5

"Family Business" is not available as a field of study in any major North American business school.

Question 6

On retirement, the main advisor for a family business owner should be the family member taking over the business.

Question 7

Family businesses are successfully transferred to the next generation in:

A) ninety percent of all cases.
B) more than two thirds of all cases.
C) less than one third of all cases.
D) less than ten percent of all cases.

Question 8

Parents generally find it easy to delegate to their offspring.

Question 9

A second-generation owner of a family business is not a true entrepreneur.

Question 10

Which of the following is not one of the plans for retiring business owners?

A) retirement plan.
B) estate plan.
C) succession plan.
D) tax plan.

Question 11

Creating two classes of shares, only one of which will grow in value is called:

A) probate.
B) estate freeze.
C) bequeathing.
D) share succession.

Question 12

Leading the family business requires a deep involvement with family politics.

Question 13

Business owners are most likely to commit to a succession plan when they are in their fifties.

Question 14

History has shown that family firms are more successful when:

A) the business is seen as a long-term trust of the family.
B) it is seen as disloyal to not work for the business.
C) personal issues are given priority over business issues.
D) all of the above.

Question 15

A family council carries the same authority as a board of directors.

Question 16

A well-run family business has:

A) a single family member in control.
B) formal lines of authority.
C) competitive industry pay rates.
D) all of the above.

Question 17

Which of the following is not a typical family business problem?

A) incompetent family members in positions of responsibility.
B) theft of the assets by family members.
C) battles for control among family members.
D) attempts to use the business as a weapon in family feuds.

Question 18

Customer loyalty is more likely to be retained when there is an abrupt transition of power.

Question 19

Family businesses can be used to sponsor qualified relatives as immigrants when:

A) the relative is economic distress.
B) when the business cannot find a skilled Canadian for the job.
C) when the relative is required for a position of trust.
D) when quotas for that country have not been filled.

Question 20

The increase in value of an investment is subject to:

A) capital gain tax.
B) retirement tax.
C) estate tax.
D) probate tax.

Question 21

Define the term "family business" and use examples to show that this could cover a wide assortment of ownership and employment arrangements.

Question 22

Explain several basic approaches to reducing conflict within family businesses.

Question 23

The ability to experience the feelings and motives of others is called .

Question 24

The process of making contacts and building relationships for mutual support is called .

Question 25

Outline the process of planning for retirement and identify the major advisors involved, specifying the roles of each. .

Question 26

Generally, the most advantageous legal form, for passing a business to the next generation is .

Question 27

Discuss the major advantages and disadvantages of a career in the family business. .

Question 28

refers to a training program where the trainee gets increasing responsibility over a long period of time.

Question 29

When life partners are partners in a small business, they are likely to have none of the that would be provided by an employer.