Question 1

The extra value a business can command in a sale is known as
A)goodwill.
B)saleable value.
C)market value.
D)asset value.

Accepted Answer

Goodwill represents the extra value a business can command in a sale, beyond its tangible assets. It includes factors like brand reputation, customer loyalty, and intellectual property.

Question 2

What is the role of business brokers in acquiring an established entrepreneurial venture?

Accepted Answer

The answer of What is the role of business brokers...

Question 3

A franchise system can be used for handling
A)goods and services.
B)services only.
C)inventory.
D)materials.

Accepted Answer

The answer of A franchise system can be used for...

Question 4

The advantages of franchising do not include
A)training and guidance.
B)brand-name appeal.
C)a proven track record.
D)franchise fees.

Accepted Answer

Franchise fees are not an advantage to the franchisee; they are costs paid by the franchisee to the franchisor for the right to use the franchise brand and system.

Question 5

The person who sells the franchise is usually required to do all of the following except
A)pay a fee.
B)provide professional management training to the unit's staff.
C)help out with financial assistance.
D)provide continuing aid and guidance to the person buying the franchise.

Accepted Answer

The person who sells the franchise, typically the franchisor, is not usually required to pay a fee; instead, the person buying the franchise pays a fee to the franchisor.

Question 6

Briefly explain the new-old approach to creating new ventures.

Accepted Answer

The answer of Briefly explain the new-old approach to creating...

Question 7

Coming up with a unique good or service is a _____ approach, while adapting something that is currently on the market or extending the offering to an area where it is not presently available is a(n) _____ approach.
A)new-new; old-old
B)new-old; old-old
C)new-new; new-old
D)new-old; old-new

Accepted Answer

Creating a unique good or service is a "new-new" approach because it involves innovation and the introduction of something entirely new. Adapting something that exists or extending its availability is a "new-old" approach, as it involves taking existing concepts or products and modifying or expanding their reach.

Question 8

Which of the following is not considered an emerging Internet opportunity?
A)niche consumables
B)educational tutoring
C)mobile advertising
D)nanotechnology

Accepted Answer

The answer of Which of the following is not considered...

Question 9

A franchise is any arrangement where the owner has licensed others to sell goods or services by which of the following?
A)trademark
B)contact
C)license
D)patent

Accepted Answer

A franchise involves the use of a trademark, which is a recognizable sign, design, or expression that identifies products or services of a particular source.

Question 10

A business has to increase its sales annually to net as much as it did in the previous year when
A)profits are rising as fast as sales.
B)profits are not rising as fast as sales.
C)sales are trending upward.
D)sales and profits are trending down at the same rate.

Accepted Answer

When profits are not rising as fast as sales, a business must increase its sales annually to net the same amount as it did the previous year, because the profit margin (profit per sale) is decreasing.

Question 11

Which of the following costs do not add to the cost of franchising?
A)insurance
B)prepaid utility bills
C)legal and professional fees
D)opening product inventory

Accepted Answer

Prepaid utility bills are considered operational expenses rather than initial franchising costs. Initial franchising costs typically include fees for insurance, legal and professional services, and inventory necessary to start the franchise.

Question 12

When should a potential franchisee receive the Franchise Disclosure Document (FDD)?
A)two days before signing a contract or paying any money
B)at least 10 days before signing a contract or paying any money
C)two days before signing a contract
D)at least 10 days before paying any money

Accepted Answer

The Federal Trade Commission requires that a potential franchisee receive the Franchise Disclosure Document (FDD) at least 14 calendar days before they are asked to sign any contract or pay any money to the franchisor. This rule ensures that the franchisee has sufficient time to review the document, seek advice, and make an informed decision.

Question 13

Which of the following is not a key question to ask when buying a business?
A)Why is the business being sold?
B)Is the building heated with gas or electricity?
C)What is the condition of the inventory?
D)How many of the employees will remain?

Accepted Answer

The type of heating in a building (gas or electricity) is generally not a key question when evaluating the purchase of a business. Important considerations typically focus on reasons for the sale, the state of inventory, and employee retention, which directly impact the business's operations and potential for success.

Question 14

A(n) _____ approach indicates the importance of people's awareness of their daily lives for developing new business ideas.
A)new-new
B)old-old
C)old-new
D)new-old

Accepted Answer

The "new-new" approach emphasizes the significance of understanding individuals' daily experiences and consciousness in generating innovative business ideas. This approach suggests that by closely observing and understanding the nuances of people's everyday lives, entrepreneurs can identify unmet needs and opportunities for new products or services.

Question 15

Why did the Federal Trade Commission enact the Franchise Disclosure Rule?

Accepted Answer

The answer of Why did the Federal Trade Commission enact...

Quiz 7: Pathways to Entrepreneurial Ventures

The extra value a business can command in a sale is known as

What is the role of business brokers in acquiring an established entrepreneurial venture?

A franchise system can be used for handling

The advantages of franchising do not include

The person who sells the franchise is usually required to do all of the following except

Briefly explain the new-old approach to creating new ventures.

Coming up with a unique good or service is a _ approach, while adapting something that is currently on the market or extending the offering to an area where it is not presently available is a(n) _ approach.

Which of the following is not considered an emerging Internet opportunity?

A franchise is any arrangement where the owner has licensed others to sell goods or services by which of the following?

A business has to increase its sales annually to net as much as it did in the previous year when

Which of the following costs do not add to the cost of franchising?

When should a potential franchisee receive the Franchise Disclosure Document (FDD) ?

Which of the following is not a key question to ask when buying a business?

A(n) _____ approach indicates the importance of people's awareness of their daily lives for developing new business ideas.

Why did the Federal Trade Commission enact the Franchise Disclosure Rule?