Question 1

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

Accepted Answer

The four important factors are: Alternative Shopping Choices,Barriers and Pockets,Drive-Time Analysis,and Intuition

Question 2

Which of the following sequences of the three-step location model is correct?
A)BPI,DMAs,Individual Site Analysis
B)DMAs,Individual Site Analysis,BPI
C)DMAs,BPI,Individual Site Analysis
D)Individual Site Analysis,DMAs,BPI

Accepted Answer

The elements of the three-step sequence are as follows: (1)DMAs or Designated Marketing Areas,(2)BPI or Buying Power Index,and (3)Individual Site Analysis

Question 3

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

Accepted Answer

When determining the store layout,it is important that two concepts receive primary consideration: customer traffic and employee traffic

Question 4

Two primary points must be considered when a franchisor develops expansion plans for a franchise.What are they?
A)distribution and number of existing franchises
B)overhead and distribution
C)overhead and franchisor's previous experience with expansion
D)number of existing franchises and franchisor's previous experience with expansion

Accepted Answer

Overhead costs (costs of doing business)and distribution factors and costs (services expected by a franchisee from a franchisor)are the primary considerations that underlie any proposed expansion by a franchisor.These costs can vary considerably.

Question 5

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.

Accepted Answer

Unique businesses aren't concerned with proximity to competitors because the uniqueness of their product or service draws customers from a wide area,and the number of their competitors is limited.A competitive business offers the same or similar kinds of products or services as other franchised or independent businesses within the community,and convenience,rather than proximity to competition,is a major factor in determining site for the business.Comparative businesses should normally be near competitors so that potential customers can compare products.

Question 6

One of the more interesting ratios for franchising is the Location Selection Ratio or Sales/Costs ratio.Which of the following ratios would be ranked the best?
A)¼
B)½
C)1
D)all of the above are desirable ratios

Accepted Answer

This ratio is best when it equals 1 or better

Question 7

Which of the following does Smoothie King founder Stephen Kuhnau credit as the reason for his success?
A)his education
B)the support of other entrepreneurs
C)the health problems he faced as a teenager
D)his previous business experience

Accepted Answer

As a teenager,Kuhnau suffered from hypoglycemia,chronic allergies and skin problems.This led him to experiment with nutritional smoothie drinks and eventually become the founder of the New Orleans-based Smoothie King.Kuhnau claims that it was destiny that led him to where he is today,and that his success couldn't have come without the health struggles he faced in his youth.

Question 8

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

Accepted Answer

Store and driveway frontage of less than 100 feet should be avoided if possible.Typically 100 to 200 feet of frontage is considered sufficient.

Question 9

Which crucial factor would most likely mean the difference between success and failure for a potential franchise unit?
A)management practices
B)owner's knowledge and skill level
C)location
D)all of the above are equally important to the success or failure of the franchise.

Accepted Answer

Location is the crucial factor.If a business person lacks the knowledge and skill appropriate to the particular business field and is also a poor manager,the franchise is most assuredly on the road to failure.But if the franchise has a good location,there is a chance the business might succeed even in spite of the owner's shortcomings.

Question 10

Which philosophy of expansion is,as a rule,the best method for franchisors?
A)the shotgun approach
B)the rifle shot approach
C)seeding
D)whichever method the franchisor deems appropriate for a their particular business

Accepted Answer

The shotgun approach involves developing as many franchised units within a state or trade area as quickly,practically,and profitably as possible.The rifle shot approach entails identifying and establishing a master franchisee within a fairly large territory or district and relying on that franchisee to do the further development within the specified territory.The concept of company store "seeding" begins with the establishment of a franchisor-owned (or company)store as the first in a trade area.No one approach is always the better one.

Quiz 9: Location and Site Selection

Four factors are important in determining the size and shape of a primary service area (PSA) .These include all of the following EXCEPT:

Which of the following sequences of the three-step location model is correct?

Which two concepts receive primary consideration when determining store layout?

Two primary points must be considered when a franchisor develops expansion plans for a franchise.What are they?

Which of the following types of businesses benefit from being located near competitors?

One of the more interesting ratios for franchising is the Location Selection Ratio or Sales/Costs ratio.Which of the following ratios would be ranked the best?

Which of the following does Smoothie King founder Stephen Kuhnau credit as the reason for his success?

Adequate frontage is a necessity for most retail businesses.What amount is generally considered adequate?

Which crucial factor would most likely mean the difference between success and failure for a potential franchise unit?

Which philosophy of expansion is,as a rule,the best method for franchisors?