Deck 13: Obtaining Venture and Growth Capital

Question 1

Franchisor field support can be used to determine the stability and strength of the organization.

Answer 1

True

Question 2

Not all franchises have (or even need) a well-defined service delivery system.

Answer 2

False

Question 3

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

Answer 3

False

Question 4

Research to develop a demographic profile of the customer base will not include "non-user" profiles.

Question 5

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

Question 6

Personality variables such as self-confidence, conservativism, and independence are used to segment markets.

Question 7

Multiple market presence is at high risk with marginal return when it is provincial.

Question 8

Market share is at its lowest risk with average return when it is No. 1 and dominant.

Question 9

There are over 1000 franchises in Canada.

Question 10

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

Question 11

The successful franchise relationship defines and exploits an opportunity as a team.

Question 12

Franchisees are best motivated with bonuses paid for growth in the number of stores.

Question 13

In franchising, the franchiser is the concept innovator who grows by seeking others to operate the concept in local markets.

Question 14

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

Question 15

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

Question 16

Franchise brands signal a price-value relationship in the minds of consumers.

Question 17

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

Question 18

With regard to national media buys, "best efforts" relates to the quality and diversity of the advertising and PR support.

Question 19

At the most fundamental level, the primary target audience is the defining quality of the opportunity recognition process.

Question 20

Multiple market presence is at acceptable risk with incremental return when it is national.

Question 21

Inconsistency from franchisee to franchisee is generally to be avoided in a franchise system because:

A) It will erode brand value
B) Different pricing is considered unfair by the customer
C) Offering different products in different markets cannot be properly management
D) Information system and financial control, including auditing cannot be properly conducted
E) It leads to confusion throughout the value chain

Question 22

The road map for marshalling resources for the franchise comes from establishing the service delivery system.

Question 23

The financial performance of public franchisors relative to the TSX index is:

A) Generally inferior
B) Generally superior
C) About the same
D) A curvilinear relationship
E) Unknown

Question 24

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

Question 25

Franchising laws in Canada are:

A) fairly uniform
B) inconsistent among provinces and territories
C) federally established
D) rapidly changing
E) generally written to favour the franchisee

Question 26

There are approximately how many franchises in Canada?

A) 100
B) 200
C) 500
D) 900
E) 1,200

Question 27

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

A) Field support
B) Name and trademark
C) Operational support
D) Service delivery system
E) Financial backing of franchisor

Question 28

Describe the entrepreneurial nature of the franchising model.

Question 29

If adding suppliers to the approved list is possible, this constitutes a de facto tying agreement

Question 30

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

Question 31

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

Question 32

The end result of the organization, execution, and transfer of the service delivery system is the firm's competitive advantage.

Question 33

In the franchise relationship model, the financial structure flows from pro forma analysis of customer demand and the cost associated with development and execution of the service delivery system.

Question 34

At the centre of the franchise relationship model is the:

A) Customer
B) Market
C) Contract
D) Financial structure
E) Information system/technology

Question 35

Data collection can be integral to refining the primary target audience. A demographic profile includes all of the following except:

A) Age and gender
B) Income
C) Home address and work address
D) Marital status and family status
E) Social class and lifestyle

Question 36

What would be the most attractive aspects of franchising to you? What is the least attractive part of franchising?

Question 37

What aspect of franchising does area of dominant influence (ADI) relate to?

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

Question 38

Compared to a national franchise, a local franchise will have:

A) Same level of risk and reward
B) Less risk and less reward
C) More risk and more reward
D) Less risk and more reward
E) More risk and less reward

Question 39

The franchise relationship model is:

A) dynamic
B) primarily controlled by the franchisor
C) primarily controlled by the franchisee
D) driven by contracts and legal agreements
E) established at the outset and rarely opened for renegotiation

Question 40

The franchise relationship model takes the entrepreneurial framework provided by the Timmons Model and connects the specific processes that are unique to franchising.