Test your basic knowledge |

Franchise Basics

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. Typical ways harvesting occurs
Only one offering/selling it - replicable - make $ - support fee structure - prototype - history - comp.
Ipo - sale - merger - draw cash out
Finances - experience - education
Banks - suppliers - owners - and employees

2. What do franchisees earn money on
Conviction - know laws - tax rates - can you bring products in and out - cost and availability of resources
Ipo - sale - merger - draw cash out
Net profit
Ftc has not reviewed the document - consult lawyer - read entire doc. - and take time

3. Profile of franchisee
Low interest rates - low unemployment - good economy
Who can afford it - ability to operate your franchise - where they live
Ipo - sale - merger - draw cash out
Fdd

4. Goal of harvesting
Renew - close - convert to independent store
Net profit
Deliver business system - signage - products - taught - good product - geographical acceptance
Cashing out and maximizing value for stakeholders

5. 3 ways to ensure correct financial reporting
...
Fdd
10 days to think about contract 5 days with completed contract
Low interest rates - low unemployment - good economy

6. How to evaluate financial potential
Talk to franchisees - ask for data on company stores - press releases - conference calls
Banks - suppliers - owners - and employees
Cashing out and maximizing value for stakeholders
Only one offering/selling it - replicable - make $ - support fee structure - prototype - history - comp.

7. Considerations for franchising
Top 100 cities - proactive not reactive - controlled growth strategy
Ftc has not reviewed the document - consult lawyer - read entire doc. - and take time
Finances - experience - education
Only one offering/selling it - replicable - make $ - support fee structure - prototype - history - comp.

8. 10 day and 5 day rule
10 days to think about contract 5 days with completed contract
Ftc has not reviewed the document - consult lawyer - read entire doc. - and take time
Fdd
Contract

9. Where to grow franchise
Top 100 cities - proactive not reactive - controlled growth strategy
Contract
Conviction - know laws - tax rates - can you bring products in and out - cost and availability of resources
Deliver business system - signage - products - taught - good product - geographical acceptance

10. 6 ways to structure international franchise system
Finances - experience - education
...
Ipo - sale - merger - draw cash out
Master - single units - multiple - joint venture - company owned stores

11. What has replaced ufoc
Finances - experience - education
Fdd
Gross profit
Trade missions - trade shows - embassies - world franchise council

12. Do 10 day and 5 day rule run separately
Yes - but they can run together
Who can afford it - ability to operate your franchise - where they live
What is clearly expected of franchisee
Only one offering/selling it - replicable - make $ - support fee structure - prototype - history - comp.

13. Successful sale
Good clean financials - employee records - supplier contracts - franchise agreement - market date - legal info
Deliver business system - signage - products - taught - good product - geographical acceptance
Ipo - sale - merger - draw cash out
Cashing out and maximizing value for stakeholders

14. How do you find right partner
Only one offering/selling it - replicable - make $ - support fee structure - prototype - history - comp.
Trade missions - trade shows - embassies - world franchise council
Banks - suppliers - owners - and employees
10 days to think about contract 5 days with completed contract

15. Key items that go into valuing
Banks - suppliers - owners - and employees
Master - single units - multiple - joint venture - company owned stores
Like new round of negotiations
Financials-profit - cash flow - ebidta - state of industry and market area - length of remaining on franchise agreement

16. Approach agreement renewal
Fdd
Financials-profit - cash flow - ebidta - state of industry and market area - length of remaining on franchise agreement
Conviction - know laws - tax rates - can you bring products in and out - cost and availability of resources
Like new round of negotiations

17. Average length of franchise agreement
Only one offering/selling it - replicable - make $ - support fee structure - prototype - history - comp.
Financials-profit - cash flow - ebidta - state of industry and market area - length of remaining on franchise agreement
15 years
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

18. What does a good clear franchise agreement articulate?
Only one offering/selling it - replicable - make $ - support fee structure - prototype - history - comp.
Gross profit
Net profit
What is clearly expected of franchisee

19. 4 items on cover page
Inform and allow for comparisons
Trade missions - trade shows - embassies - world franchise council
Low interest rates - low unemployment - good economy
Ftc has not reviewed the document - consult lawyer - read entire doc. - and take time

20. What governs franchisee/franchisor relationship
Gross profit
Contract
Who can afford it - ability to operate your franchise - where they live
Top 100 cities - proactive not reactive - controlled growth strategy

21. 5 considerations prior to franchising internationally
Finances - experience - education
Conviction - know laws - tax rates - can you bring products in and out - cost and availability of resources
Good clean financials - employee records - supplier contracts - franchise agreement - market date - legal info
10 days to think about contract 5 days with completed contract

22. Not to franchise internationally

23. Who can be a multiple stakeholder
Fdd
Talk to franchisees - ask for data on company stores - press releases - conference calls
Banks - suppliers - owners - and employees
Inform and allow for comparisons

24. Points negotiated in contract
Net profit
Finances - experience - education
Only one offering/selling it - replicable - make $ - support fee structure - prototype - history - comp.
Territory - opening dates - transfer fees - rights of first refusal and support

25. What do franchisors earn his money on?
Financials-profit - cash flow - ebidta - state of industry and market area - length of remaining on franchise agreement
Trade missions - trade shows - embassies - world franchise council
Gross profit
10 days to think about contract 5 days with completed contract

26. Evaluate potential franchisees
10 days to think about contract 5 days with completed contract
Like new round of negotiations
Only one offering/selling it - replicable - make $ - support fee structure - prototype - history - comp.
Finances - experience - education

27. Options when agreement ends
What is clearly expected of franchisee
Inform and allow for comparisons
Yes - but they can run together
Renew - close - convert to independent store

28. What makes a business replicable
What is clearly expected of franchisee
Who can afford it - ability to operate your franchise - where they live
Deliver business system - signage - products - taught - good product - geographical acceptance
Good clean financials - employee records - supplier contracts - franchise agreement - market date - legal info

29. Purpose of ufoc/fdd
Financials-profit - cash flow - ebidta - state of industry and market area - length of remaining on franchise agreement
Territory - opening dates - transfer fees - rights of first refusal and support
Finances - experience - education
Inform and allow for comparisons

30. Time good or bad to sell
Low interest rates - low unemployment - good economy
...
Like new round of negotiations
Deliver business system - signage - products - taught - good product - geographical acceptance