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Test your basic knowledge |
Franchise Basics
Start Test
Study First
Subjects
:
business-skills
,
industries
Instructions:
Answer 30 questions in 15 minutes.
If you are not ready to take this test, you can
study here
.
Match each statement with the correct term.
Don't refresh. All questions and answers are randomly picked and ordered every time you load a test.
This is a study tool. The 3 wrong answers for each question are randomly chosen from answers to other questions. So, you might find at times the answers obvious, but you will see it re-enforces your understanding as you take the test each time.
1. 5 considerations prior to franchising internationally
Inform and allow for comparisons
Conviction - know laws - tax rates - can you bring products in and out - cost and availability of resources
Ipo - sale - merger - draw cash out
Top 100 cities - proactive not reactive - controlled growth strategy
2. How to evaluate financial potential
Talk to franchisees - ask for data on company stores - press releases - conference calls
Finances - experience - education
Banks - suppliers - owners - and employees
Like new round of negotiations
3. 3 ways to ensure correct financial reporting
...
Yes - but they can run together
Talk to franchisees - ask for data on company stores - press releases - conference calls
Only one offering/selling it - replicable - make $ - support fee structure - prototype - history - comp.
4. How do you find right partner
Who can afford it - ability to operate your franchise - where they live
Trade missions - trade shows - embassies - world franchise council
Inform and allow for comparisons
Fdd
5. Options when agreement ends
Renew - close - convert to independent store
Top 100 cities - proactive not reactive - controlled growth strategy
Like new round of negotiations
10 days to think about contract 5 days with completed contract
6. 4 items on cover page
Ftc has not reviewed the document - consult lawyer - read entire doc. - and take time
Good clean financials - employee records - supplier contracts - franchise agreement - market date - legal info
Gross profit
Master - single units - multiple - joint venture - company owned stores
7. Do 10 day and 5 day rule run separately
Top 100 cities - proactive not reactive - controlled growth strategy
Doesn't meet local needs - no $ out of country - short term problems - no commitment - not willing to modify - and don't want to accommodation customs
Yes - but they can run together
Financials-profit - cash flow - ebidta - state of industry and market area - length of remaining on franchise agreement
8. Goal of harvesting
Territory - opening dates - transfer fees - rights of first refusal and support
...
Cashing out and maximizing value for stakeholders
Gross profit
9. Profile of franchisee
Fdd
Inform and allow for comparisons
Who can afford it - ability to operate your franchise - where they live
Ftc has not reviewed the document - consult lawyer - read entire doc. - and take time
10. Typical ways harvesting occurs
Ipo - sale - merger - draw cash out
Only one offering/selling it - replicable - make $ - support fee structure - prototype - history - comp.
10 days to think about contract 5 days with completed contract
Contract
11. Where to grow franchise
Master - single units - multiple - joint venture - company owned stores
Top 100 cities - proactive not reactive - controlled growth strategy
Finances - experience - education
What is clearly expected of franchisee
12. Successful sale
Top 100 cities - proactive not reactive - controlled growth strategy
Talk to franchisees - ask for data on company stores - press releases - conference calls
Yes - but they can run together
Good clean financials - employee records - supplier contracts - franchise agreement - market date - legal info
13. Not to franchise internationally
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14. What do franchisees earn money on
Inform and allow for comparisons
Renew - close - convert to independent store
Who can afford it - ability to operate your franchise - where they live
Net profit
15. Points negotiated in contract
Inform and allow for comparisons
Conviction - know laws - tax rates - can you bring products in and out - cost and availability of resources
Banks - suppliers - owners - and employees
Territory - opening dates - transfer fees - rights of first refusal and support
16. Approach agreement renewal
Trade missions - trade shows - embassies - world franchise council
Inform and allow for comparisons
Renew - close - convert to independent store
Like new round of negotiations
17. What makes a business replicable
Finances - experience - education
Deliver business system - signage - products - taught - good product - geographical acceptance
Good clean financials - employee records - supplier contracts - franchise agreement - market date - legal info
What is clearly expected of franchisee
18. Average length of franchise agreement
Inform and allow for comparisons
Top 100 cities - proactive not reactive - controlled growth strategy
15 years
Cashing out and maximizing value for stakeholders
19. 6 ways to structure international franchise system
...
10 days to think about contract 5 days with completed contract
Talk to franchisees - ask for data on company stores - press releases - conference calls
Master - single units - multiple - joint venture - company owned stores
20. What governs franchisee/franchisor relationship
Yes - but they can run together
Contract
15 years
Low interest rates - low unemployment - good economy
21. 10 day and 5 day rule
10 days to think about contract 5 days with completed contract
Inform and allow for comparisons
Talk to franchisees - ask for data on company stores - press releases - conference calls
15 years
22. Time good or bad to sell
Low interest rates - low unemployment - good economy
Trade missions - trade shows - embassies - world franchise council
What is clearly expected of franchisee
Fdd
23. What do franchisors earn his money on?
Net profit
Only one offering/selling it - replicable - make $ - support fee structure - prototype - history - comp.
Gross profit
Top 100 cities - proactive not reactive - controlled growth strategy
24. Evaluate potential franchisees
Finances - experience - education
What is clearly expected of franchisee
Who can afford it - ability to operate your franchise - where they live
Talk to franchisees - ask for data on company stores - press releases - conference calls
25. Purpose of ufoc/fdd
Like new round of negotiations
Yes - but they can run together
Inform and allow for comparisons
Only one offering/selling it - replicable - make $ - support fee structure - prototype - history - comp.
26. Considerations for franchising
Ftc has not reviewed the document - consult lawyer - read entire doc. - and take time
Only one offering/selling it - replicable - make $ - support fee structure - prototype - history - comp.
...
Gross profit
27. What has replaced ufoc
Fdd
Doesn't meet local needs - no $ out of country - short term problems - no commitment - not willing to modify - and don't want to accommodation customs
Inform and allow for comparisons
Territory - opening dates - transfer fees - rights of first refusal and support
28. Key items that go into valuing
Financials-profit - cash flow - ebidta - state of industry and market area - length of remaining on franchise agreement
Ipo - sale - merger - draw cash out
Gross profit
Who can afford it - ability to operate your franchise - where they live
29. What does a good clear franchise agreement articulate?
Gross profit
...
What is clearly expected of franchisee
Cashing out and maximizing value for stakeholders
30. Who can be a multiple stakeholder
Cashing out and maximizing value for stakeholders
...
Banks - suppliers - owners - and employees
Talk to franchisees - ask for data on company stores - press releases - conference calls