Question 1

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

Accepted Answer

Franchisor field support is one of the key factors in the success of a franchise system. The level of support, guidance, training and resources provided by the franchisor to its franchisees, in the field, can reflect the stability, strength and commitment of the franchisor towards the franchise network. Therefore, monitoring and evaluating franchisor field support can provide insights into the overall health and performance of the franchise system.

Question 2

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

Accepted Answer

Franchises typically have a well-defined service delivery system in order to maintain consistency across all locations and ensure customers receive the same experience no matter where they go. However, there may be some exceptions depending on the type of franchise and its business model.

Question 3

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

Accepted Answer

A demographic profile typically segments potential customers based on characteristics such as age, gender, income, education, and occupation, not social class, lifestyle, and personality traits, which are more related to psychographic profiling.

Question 4

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

Accepted Answer

Research to develop a demographic profile of the customer base should also include non-user profiles in order to gain a fuller understanding of the market and potential opportunities.

Question 5

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

Accepted Answer

The answer of A franchisor is under no obligation to...

Question 6

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

Accepted Answer

Personality variables can be used to segment markets based on the characteristics and preferences of consumers with similar personality traits. This can help businesses develop marketing strategies that appeal to specific personality types.

Question 7

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

Accepted Answer

When a business has multiple market presence but operates only in a specific, limited area (i.e. provincial), the risk is high due to a limited customer base and competition from local businesses. The return on investment may also be marginal as the customer base is limited.

Question 8

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

Accepted Answer

When a company has a dominant market share, it has a competitive advantage and higher profits than its competitors. This reduces its risk of loss and improves its average return.

Question 9

There are over 1000 franchises in Canada.

Accepted Answer

The answer of 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.

Accepted Answer

If the delivery of the product matches the marketing message, it creates a positive and consistent customer experience, which reinforces the brand and increases customer loyalty. This, in turn, can enhance the overall value of the franchise.

Question 11

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

Accepted Answer

A successful franchise relationship is based on teamwork, where both franchisor and franchisee work together to define and exploit a business opportunity. This cooperation is crucial for the success of the franchise, as it allows for a consistent and replicable business model that can be implemented across multiple locations.

Question 12

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

Accepted Answer

While bonuses can be a motivator for franchisees, growth in the number of stores may not always be the best indicator of success or an achievable goal for all franchisees. Other metrics such as sales growth, customer satisfaction, and profitability may be more relevant and achievable for certain franchisees. Ultimately, the best way to motivate franchisees will depend on the specific franchise system and the individual franchisee's goals and preferences.

Question 13

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

Accepted Answer

The franchiser is the one who has already established a successful business model or concept and is looking for franchisees to operate that model in different geographic locations.

Question 14

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

Accepted Answer

The answer of A demographic profile is a compilation of...

Question 15

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

Accepted Answer

Franchisors typically view field support as a critical function for ensuring franchisee success and maintaining brand standards, not as a diplomatic or pejorative exercise.

Question 16

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

Accepted Answer

Franchise brands often have established prices for their products or services, which can create an expectation for consumers of a certain level of quality or value for that price. This consistency can help to build trust and loyalty with consumers.

Question 17

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

Accepted Answer

The service delivery system is a critical component of a franchise venture's competitive advantage. It is the way in which the franchise delivers its products or services to the customers, and a well-designed system can set the franchise apart from its competitors. This includes not only the products and services themselves but also the processes, technologies, and personnel involved in delivering them. As such, the service delivery system is a key factor in a franchise's success or failure.

Question 18

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

Accepted Answer

"Best efforts" refers to the level of effort that is put into executing a campaign, not the quality or diversity of the advertising and PR support. It means that the agency will use reasonable and diligent efforts to fulfill their obligations, but there is no guarantee of results.

Question 19

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

Accepted Answer

The primary target audience plays a crucial role in determining the opportunities that exist in the market. Identifying the needs and preferences of the target audience helps entrepreneurs identify gaps in the market where they can offer a new product or service that meets those needs. Therefore, the target audience is a defining quality of the opportunity recognition process.

Question 20

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

Accepted Answer

The answer of Multiple market presence is at acceptable risk...

Quiz 13: Obtaining Venture and Growth Capital