SOLVED

11) Free riding among franchisees is most likely prevented by ________. A) franchisors striving to build a strong brand image B) franchisees using social media for promotions C) franchisors enforcing business format rules D) franchisees outsourcing most service tasks E) franchisors employing in-house attorneys 12) How does franchising most likely benefit a franchisor? A) protects the brand name and logo B) provides financial capital for growth C) provides knowledge to shareholders D) identifies the needs of niche markets E) protects the franchisor against economic risk 13) By opting for franchising instead of setting up company-owned branches, a firm most likely overcomes the problem of ________. A) managerial scarcity B) brand inconsistency C) inadequate service D) strategic control E) free riding 14) Franchise managers are most likely encouraged to work hard because they are ________. A) residual claimants B) human capital C) stockholders D) opportunists E) free riders 15) Which of the following is LEAST likely an advantage of franchising for franchisors? A) obtaining financial capital B) growing the brand quickly C) avoiding monitoring costs D) motivating local managers E) overseeing hiring practices 16) According to Howard Schultz, the founder of Starbucks, franchising ________. A) serves as the best way to run a channel B) prevents firms from growing fast enough C) improves product and service consistency D) leads firms to propagate major problems E) creates a strong sense of brand ownership 17) In a(n) ________ franchise system, dealers meet minimum criteria established by the manufacturer and receive the right to sell a product and use the manufacturer’s trade name for promotional purposes. A) product B) authorized C) multi-unit D) independent E) company-owned 18) The practice of licensing an entire way of doing business under a brand name in exchange for ongoing fees from franchisees is known as ________. A) B2B licensing B) multi-unit franchising C) business format franchising D) authorized franchise marketing E) intellectual property franchising 19) In the EU, a franchise is distinguished as having all of the following features EXCEPT ________. A) use of a common name B) use of a common sign with a uniform facility presentation C) communication of know-how from franchisor to franchisee D) transfer of regular stock options from franchisor to franchisee E) continuing provision of commercial assistance by the franchisor to the franchisee 20) Maria recently signed a franchise contract with Perfect Pizza. She will have to acquire inventory, purchase equipment, and advertise the restaurant’s opening. If Maria’s franchise fails, which investment will she never recover? A) sunk costs B) lump sums C) variable fees D) fixed costs E