Franchising:
A) is the only imitation strategy discussed in the text.
B) reduces risk of downside loss.
C) is the same as the me-too strategy.
D) reduces the amount of competition an entrepreneur will face.

Question

Franchising: 
A) is the only imitation strategy discussed in the text.
B) reduces risk of downside loss.
C) is the same as the me-too strategy.
D) reduces the amount of competition an entrepreneur will face.

Quizplus · Accepted Answer

Franchising does reduce the risk of downside loss for an entrepreneur as they are buying into a successful and established brand, which provides them with a proven business model and support system. However, franchising is not the same as the me-too strategy (C) and does not necessarily reduce the amount of competition (D). While franchising is one form of imitation strategy, it is not the only one discussed in the text (A).