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