Question 1

In a franchise, the franchisee gets the opportunity to start a business with limited capital and to make use of the business experience of others.

Accepted Answer

A) True 
 B)False

Question 2

Small businesses are expected to remain the dominant form of organisation in this country.

Accepted Answer

A) True 
 B)False

Question 3

A licence to operate an individually owned business as though it were part of a chain is a franchise.

Accepted Answer

A) True 
 B)False

Question 4

The disadvantages of franchising mainly affect the franchisee because the franchisor retains a great deal of control.

Accepted Answer

A) True 
 B)False

Question 5

Service industries account for ___ percent of all small businesses.

Accepted Answer

A)   29
B)   .29
C)   48
D)   58
E)   66F) B) and C)
G) A) and E)

Question 6

In a franchise business, the party paying the franchise fee is known as the

Accepted Answer

A)   franchisee.
B)   franchisor.
C)   entrepreneur.
D)   business owner.
E)   manager.F) C) and D)
G) C) and E)

Question 7

Mc-King Chicken
Brian decided to open a local franchise of the well-known Mc-King Chicken, a fast-food restaurant.Before he took the initiative to open the franchise, he tried to weigh all the advantages and disadvantages.He decided, based on his research and understanding, that it would be beneficial to open a local fast-food restaurant.
Mc-King has become quite successful domestically, and now it is exploring the possibility of opening franchises internationally.The company hired an international agency to help it learn what and what not to do.After the agency met with the managers of Mc-King a few times, the Mc-King management decided it would go ahead with its decision to expand internationally.
-Refer to Mc-King Chicken.The international agency advising Mc-King would have made which of the following recommendations?

Accepted Answer

A)   Be aware that less money is needed to fund international operations.
B)   Remember that strong local management is needed to keep an international franchise going.
C)   Plan for the local competition to be weak.
D)   Assume that customers everywhere need or want what the franchise offers.
E)   Expect hiring, training, and marketing practices to be identical in all countries.F) None of the above
G) A) and D)

Question 8

Sarah owns a 7-Eleven franchise.What is the primary disadvantage of owning a franchise for Sarah?

Accepted Answer

A)   She has to pay royalties to the franchisor.
B)   She cannot use her name as the restaurant name.
C)   The franchisor still retains a great deal of control.
D)   Sarah is not allowed to hire her own employees.
E)   Sarah may not find ways to improve operations.F) A) and E)
G) B) and C)

Question 9

Which of the following is not considered a category in the distribution industries?

Accepted Answer

A)   Manufacturing
B)   Wholesaling
C)   Retailing
D)   Transportation
E)   CommunicationsF) D) and E)
G) A) and B)

Question 10

All franchisors give geographical protection to their franchise holders.

Accepted Answer

A) True 
 B)False

Question 11

The primary financial function of the Small Business Administration is to

Accepted Answer

A)   lend money.
B)   guarantee loans.
C)   find sources of financial aid.
D)   help owners apply for loans.
E)   provide aid only when a natural disaster occurs.F) A) and D)
G) B) and E)

Question 12

Which of the following organisations would be considered a small business?

Accepted Answer

A)   Producer of semiconductors with 2,000 employees
B)   Wholesaler with 50 employees
C)   Retail clothing store chain with annual sales of €26 million
D)   Construction company with average annual receipts of €32 million
E)   Farmer with annual receipts of €10 millionF) All of the above
G) B) and C)

Question 13

Doug has always wanted to operate his own fast-food restaurant, but he knows the high failure rate of restaurants.To increase his chances of success, he should consider

Accepted Answer

A)   getting a loan from the SBA.
B)   buying a franchise of a well-established restaurant.
C)   hiring only highly educated employees.
D)   not having a drive-through at his restaurant.
E)   saving money by selling low-quality food.F) C) and E)
G) A) and B)

Question 14

The following statement answers which major question that a business plan should address? "This business will serve over 200 customers by the end of the year and employ seven full-time employees."

Accepted Answer

A)   How much will the new business cost?
B)   Why is this new business a good idea?
C)   What are the goals for the business?
D)   What is the nature and mission of the business?
E)   How often will the business advertise?F) A) and E)
G) B) and E)

Question 15

Which of the following statements is true regarding the profitability of new businesses?

Accepted Answer

A)   It may take several years for a new business to begin showing a profit.
B)   Profitability is not an important issue for new businesses.
C)   Most new businesses will turn a profit within the first year.
D)   If a company does not show a profit within the first year, it will fail.
E)   Most new businesses are highly profitable when they first start.F) B) and E)
G) B) and D)

Question 16

An individual or organisation granting a licence to operate an individually owned business as though it were part of a chain of outlets or stores is a(n)

Accepted Answer

A)   franchise.
B)   franchisor.
C)   franchisee.
D)   venture capitalist.
E)   entrepreneur.F) A) and B)
G) B) and E)

Question 17

Small businesses operate only in the service industry, not in manufacturing.

Accepted Answer

A) True 
 B)False

Question 18

International trade will become more important to small-business owners in the new century.

Accepted Answer

A) True 
 B)False

Question 19

Approximately what percentage of the jobs in the UK do small businesses provide?

Accepted Answer

A)   5 percent
B)   10 percent
C)   30 percent
D)   Over 50 percent
E)   Nearly 90 percentF) A) and B)
G) All of the above

Question 20

Money invested in small firms with the potential to become very successful is known as venture capital.

Accepted Answer

A) True 
 B)False

Exam 5: Small Business, Entrepreneurship, and Franchises

In a franchise business, the party paying the franchise fee is known as the

Correct Answer
verified

Small businesses operate only in the service industry, not in manufacturing.

Correct Answer
verified

The primary financial function of the Small Business Administration is to

Correct Answer
verified

Doug has always wanted to operate his own fast-food restaurant, but he knows the high failure rate of restaurants.To increase his chances of success, he should consider

Correct Answer
verified

A licence to operate an individually owned business as though it were part of a chain is a franchise.

Correct Answer
verified

Service industries account for ___ percent of all small businesses.

Correct Answer
verified

Which of the following is not considered a category in the distribution industries?

Correct Answer
verified

Which of the following organisations would be considered a small business?

Correct Answer
verified

An individual or organisation granting a licence to operate an individually owned business as though it were part of a chain of outlets or stores is a(n)

Correct Answer
verified

The following statement answers which major question that a business plan should address? "This business will serve over 200 customers by the end of the year and employ seven full-time employees."

Correct Answer
verified

Money invested in small firms with the potential to become very successful is known as venture capital.

Correct Answer
verified

Small businesses are expected to remain the dominant form of organisation in this country.

Correct Answer
verified

Which of the following statements is true regarding the profitability of new businesses?

Correct Answer
verified

The disadvantages of franchising mainly affect the franchisee because the franchisor retains a great deal of control.

Correct Answer
verified

Approximately what percentage of the jobs in the UK do small businesses provide?

Correct Answer
verified

In a franchise, the franchisee gets the opportunity to start a business with limited capital and to make use of the business experience of others.

Correct Answer
verified

Correct Answer
verified

All franchisors give geographical protection to their franchise holders.

Correct Answer
verified

Sarah owns a 7-Eleven franchise.What is the primary disadvantage of owning a franchise for Sarah?

Correct Answer
verified

International trade will become more important to small-business owners in the new century.

Correct Answer
verified

Exam 5: Small Business, Entrepreneurship, and Franchises

In a franchise business, the party paying the franchise fee is known as the

Correct AnswerverifiedShow Answer

Small businesses operate only in the service industry, not in manufacturing.

Correct AnswerverifiedShow Answer

The primary financial function of the Small Business Administration is to

Correct AnswerverifiedShow Answer

Doug has always wanted to operate his own fast-food restaurant, but he knows the high failure rate of restaurants.To increase his chances of success, he should consider

Correct AnswerverifiedShow Answer

A licence to operate an individually owned business as though it were part of a chain is a franchise.

Correct AnswerverifiedShow Answer

Service industries account for ___ percent of all small businesses.

Correct AnswerverifiedShow Answer

Which of the following is not considered a category in the distribution industries?

Correct AnswerverifiedShow Answer

Which of the following organisations would be considered a small business?

Correct AnswerverifiedShow Answer

An individual or organisation granting a licence to operate an individually owned business as though it were part of a chain of outlets or stores is a(n)

Correct AnswerverifiedShow Answer

The following statement answers which major question that a business plan should address? "This business will serve over 200 customers by the end of the year and employ seven full-time employees."

Correct AnswerverifiedShow Answer

Money invested in small firms with the potential to become very successful is known as venture capital.

Correct AnswerverifiedShow Answer

Small businesses are expected to remain the dominant form of organisation in this country.

Correct AnswerverifiedShow Answer

Which of the following statements is true regarding the profitability of new businesses?

Correct AnswerverifiedShow Answer

The disadvantages of franchising mainly affect the franchisee because the franchisor retains a great deal of control.

Correct AnswerverifiedShow Answer

Approximately what percentage of the jobs in the UK do small businesses provide?

Correct AnswerverifiedShow Answer

In a franchise, the franchisee gets the opportunity to start a business with limited capital and to make use of the business experience of others.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

All franchisors give geographical protection to their franchise holders.

Correct AnswerverifiedShow Answer

Sarah owns a 7-Eleven franchise.What is the primary disadvantage of owning a franchise for Sarah?

Correct AnswerverifiedShow Answer

International trade will become more important to small-business owners in the new century.

Correct AnswerverifiedShow Answer

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