Test your basic knowledge |

Franchizing Vocab

Instructions:
  • Answer 36 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. This type of franchise includes not only a product - service and trademark - but also the complete method to conduct the business itself - such as the marketing plan and operations manuals






2. Specifies the terms and conditions of the franchise and spells out the rights and duties of the franchisor and franchisee - includes agreement on royalties - who settles disputes






3. Franchisor determines the territory to be served






4. One week of training for managers - operating manual - guidelines for accounting audits - ongoing support / assistance






5. Requires franchisors to disclose material facts that a prospective franchisee needs to make an informed decision concerning the purchase of a franchise.






6. The primary source of legal information about a franchise available to prospective / interested franchisees






7. If a court perceives that a franchisor has aribitrarily or unfairly terminated a franchise - the franchisee will be provided with a remedy for wrongful termination.






8. Termination must be 'for cause -' such as the death or disability of the franchisee - insolvency - breach - or failure to meet quotas.






9. Fees paid to a licensor by a licensee based upon the production or sales of a licensed product






10. A fee paid by franchisees to contribute to a shared advertising fund - separate from royalty fees






11. Franchise operates under a franchisor's trade name a is identified as a member of a select group. Certain standards must be met in order to be complete






12. Two franchises share location and resources






13. Manufacturing concern licenses a dealer to sell its product. Example is an auto dealership.






14. 15 states have laws similar to federal rules requiring franchisors to provide presale disclosures to prospective franchisees






15. Franchisor usually initiates litigation






16. The person or company that gets the right from the franchisor to do business under the franchisor's trademark or trade name






17. May specify whether the premises for the business must be leased or purchased outright. Sometimes - a building must be constructed to meet the terms of the agreement.






18. The person or company that grants the franchisee the right to do business under their trademark or trade name






19. A specific type of franchise that allows individuals and organizations to buy the right to subfranchise within a geographic area






20. Also known as the UFOC - or Uniform Franchise Offering Circular - the disclosure document provides information about the franchisor and franchise system






21. Franchisee's business organization is of great concern to the franchisor. Franchisor may require that the business have a particular form and capital structure. May also provide standards of operation in terms of sales quotas - quality - and record k






22. The regular payment made by the franchisee to the franchisor - usually based on a percentage of the franchisee's gross sales






23. The franchisor's identifying marks - brand name and logo that are licensed to the franchisee






24. A type of franchise that gives the exclusive rights to open franchisee - operated units within specified areas






25. Franchisee ordinarily pays an initial fee or lump-sum for the license. Franchisor relies on initial fee for profit. Sometimes franchisee is required to pay a percentage of franchisor's advertisement cost and other expensive.






26. Distributorship - Chain-style - Manufacturing or processing plant






27. A type of franchise company that does not depend upon physical location for delivery of products / services - but a virtual business






28. A method of business expansion characterized by a trademark license - payment of fees - and significant assistance and/or control






29. Protects franchisee from unreasonable demands and bad faith terminations of the franchise by the






30. Franchisor transmits to the essential ingredients or formula to make a product.






31. Marketing technique making a product or service known by it's name or symbol






32. A license that describes the relationship between the franchisor and franchisee including use of trademarks - fees - support and control






33. Agreement may provide for some degree of supervision and control by the franchisor so that it can protect the name and reputation. Certain standards for the facility and will be permitted to make periodic inspections to ensure certain standards for t






34. A format for the disclosure document which provides information about the franchisor and franchise system to the prospective franchisee






35. Franchise franchisor's method of conducting business a franchise where the franchisee simply sells the franchisor's products without using the






36. The legal - written contract between the franchisor and franchisee which tells each party what each is supposed to do