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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. What governs franchisee/franchisor relationship
Like new round of negotiations
Ftc has not reviewed the document - consult lawyer - read entire doc. - and take time
Contract
15 years
2. What do franchisees earn money on
Net profit
Talk to franchisees - ask for data on company stores - press releases - conference calls
Trade missions - trade shows - embassies - world franchise council
Territory - opening dates - transfer fees - rights of first refusal and support
3. Successful sale
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
Good clean financials - employee records - supplier contracts - franchise agreement - market date - legal info
...
Gross profit
4. 10 day and 5 day rule
10 days to think about contract 5 days with completed contract
Banks - suppliers - owners - and employees
Ipo - sale - merger - draw cash out
Talk to franchisees - ask for data on company stores - press releases - conference calls
5. What do franchisors earn his money on?
Good clean financials - employee records - supplier contracts - franchise agreement - market date - legal info
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.
Gross profit
6. Options when agreement ends
Deliver business system - signage - products - taught - good product - geographical acceptance
Renew - close - convert to independent store
Talk to franchisees - ask for data on company stores - press releases - conference calls
Inform and allow for comparisons
7. Considerations for franchising
Cashing out and maximizing value for stakeholders
Like new round of negotiations
Yes - but they can run together
Only one offering/selling it - replicable - make $ - support fee structure - prototype - history - comp.
8. Where to grow franchise
Top 100 cities - proactive not reactive - controlled growth strategy
Who can afford it - ability to operate your franchise - where they live
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
Banks - suppliers - owners - and employees
9. Average length of franchise agreement
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
15 years
Banks - suppliers - owners - and employees
Territory - opening dates - transfer fees - rights of first refusal and support
10. What makes a business replicable
Deliver business system - signage - products - taught - good product - geographical acceptance
...
Good clean financials - employee records - supplier contracts - franchise agreement - market date - legal info
Master - single units - multiple - joint venture - company owned stores
11. Do 10 day and 5 day rule run separately
Who can afford it - ability to operate your franchise - where they live
Yes - but they can run together
Finances - experience - education
Territory - opening dates - transfer fees - rights of first refusal and support
12. What has replaced ufoc
Conviction - know laws - tax rates - can you bring products in and out - cost and availability of resources
15 years
Fdd
Financials-profit - cash flow - ebidta - state of industry and market area - length of remaining on franchise agreement
13. Points negotiated in contract
Financials-profit - cash flow - ebidta - state of industry and market area - length of remaining on franchise agreement
Who can afford it - ability to operate your franchise - where they live
Territory - opening dates - transfer fees - rights of first refusal and support
Gross profit
14. 4 items on cover page
15 years
Renew - close - convert to independent store
Ftc has not reviewed the document - consult lawyer - read entire doc. - and take time
Contract
15. Who can be a multiple stakeholder
Trade missions - trade shows - embassies - world franchise council
What is clearly expected of franchisee
Banks - suppliers - owners - and employees
Ftc has not reviewed the document - consult lawyer - read entire doc. - and take time
16. Not to franchise internationally
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17. How do you find right partner
Master - single units - multiple - joint venture - company owned stores
Finances - experience - education
Trade missions - trade shows - embassies - world franchise council
Like new round of negotiations
18. 5 considerations prior to franchising internationally
Yes - but they can run together
Conviction - know laws - tax rates - can you bring products in and out - cost and availability of resources
Master - single units - multiple - joint venture - company owned stores
Talk to franchisees - ask for data on company stores - press releases - conference calls
19. How to evaluate financial potential
Net profit
15 years
Territory - opening dates - transfer fees - rights of first refusal and support
Talk to franchisees - ask for data on company stores - press releases - conference calls
20. Purpose of ufoc/fdd
Territory - opening dates - transfer fees - rights of first refusal and support
Only one offering/selling it - replicable - make $ - support fee structure - prototype - history - comp.
Inform and allow for comparisons
Master - single units - multiple - joint venture - company owned stores
21. 6 ways to structure international franchise system
15 years
Master - single units - multiple - joint venture - company owned stores
Talk to franchisees - ask for data on company stores - press releases - conference calls
Cashing out and maximizing value for stakeholders
22. Approach agreement renewal
Fdd
Yes - but they can run together
Who can afford it - ability to operate your franchise - where they live
Like new round of negotiations
23. 3 ways to ensure correct financial reporting
...
Banks - suppliers - owners - and employees
Contract
Only one offering/selling it - replicable - make $ - support fee structure - prototype - history - comp.
24. Time good or bad to sell
Cashing out and maximizing value for stakeholders
Low interest rates - low unemployment - good economy
Conviction - know laws - tax rates - can you bring products in and out - cost and availability of resources
Financials-profit - cash flow - ebidta - state of industry and market area - length of remaining on franchise agreement
25. Goal of harvesting
Inform and allow for comparisons
Who can afford it - ability to operate your franchise - where they live
Cashing out and maximizing value for stakeholders
What is clearly expected of franchisee
26. Evaluate potential franchisees
Like new round of negotiations
Low interest rates - low unemployment - good economy
Finances - experience - education
Good clean financials - employee records - supplier contracts - franchise agreement - market date - legal info
27. Profile of franchisee
10 days to think about contract 5 days with completed contract
Finances - experience - education
Who can afford it - ability to operate your franchise - where they live
Renew - close - convert to independent store
28. Key items that go into valuing
What is clearly expected of franchisee
Fdd
Financials-profit - cash flow - ebidta - state of industry and market area - length of remaining on franchise agreement
Good clean financials - employee records - supplier contracts - franchise agreement - market date - legal info
29. What does a good clear franchise agreement articulate?
What is clearly expected of franchisee
Trade missions - trade shows - embassies - world franchise council
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
10 days to think about contract 5 days with completed contract
30. Typical ways harvesting occurs
Finances - experience - education
Inform and allow for comparisons
Top 100 cities - proactive not reactive - controlled growth strategy
Ipo - sale - merger - draw cash out