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21) Anthony recently signed a franchise contract with Tasty-Freeze, an ice cream chain. As Anthony readies the store, he frequently contacts Tasty-Freeze representatives with questions about recipes, tools, and advertising. Which of the following most likely motivates the Tasty-Freeze franchise to assist Anthony as he develops his business? A) sunk costs B) lump sums C) annual profits D) upfront costs E) sales royalties 22) Kyle owns a Cars-To-Go franchise. Kyle’s franchising contract stipulates that he must purchase the cars he rents from the national Cars-To-Go franchisor, although Kyle could save money by purchasing cars from a local dealership. Which term best describes this contract requirement? A) supply fees B) tied sales C) sunk costs D) front end fees E) territorial exclusivity 23) Kyle owns a Cars-To-Go franchise. Kyle’s franchising contract stipulates that he must purchase the cars he rents from the national Cars-To-Go franchisor. What is the most likely reason that the franchisor makes this requirement? A) give Kyle the right of first refusal B) monitor rental agency’s safety rates C) ensure the quality of rental cars D) lower Kyle’s fixed franchise costs E) create contract consistency 24) The Tubby Tacos franchise holds the lease for all Tubby Tacos restaurants. Tubby Tacos franchisees make monthly lease payments to the national franchisor. What is the LEAST likely reason that Tubby Tacos ensures that it is the landlord of all franchisees? A) protect the franchisor’s rights B) obtain a better site due to franchisor size C) allow some flexibility to assist franchisees D) decrease the level of franchisor management E) enhance credibility when making termination threats 25) Why do most franchisors offer the same contract to all franchisees? A) ensure cooperation B) minimize start-up costs C) encourage longer contracts D) provide negotiation flexibility E) avoid appearing discriminatory 26) A franchisor would most likely punish a franchisee for a contract violation when _________. A) the franchisee runs a shabby facility in a highly visible location B) the franchisee is part of a dense, tightly knit network of franchisees C) strong relational governance allows the system to operate on norms of solidarity D) the franchisor has invested significantly in the franchisee that has made the violation E) performance ambiguity prevents the franchisor from clearly identifying the enforcement situation 27) What is the most likely reason that many franchisors also run company-owned stores? A) promotion strategies B) market differences C) brand equity shifts D) service outputs E) capital investments 28) Shoes-4-Less simultaneously maintains both company stores and franchised outlets. Shoes-4-Less is most likely following a ________ strategy. A) niche B) global C) multiple D) plural form E) business format 29) Coffee Cups, a national coffee shop franchise, uses a plural form strategy. The franchisor wants to create functional rivalry between the two forms by monitoring company outlets closely. Which of the following would most likely enable Coffee Cups to achieve this goal? A) general reports that cover most aspects of Coffee Cup outlet operations B) annual, announced field audits of the top performing Coffee Cup outlets C) team-building exercises to build trust between Coffee Cup managers D) performance evaluations of Coffee Cup managers and employees E) mystery shoppers who pose as customers in Coffee Cup outlets 30) Coffee Cups, a national coffee shop franchise, uses a plural form strategy. The franchisor frequently compares the performance of company and franchisee outlets to encourage each to improve sales. Which of the following most likely enables the Coffee Cups franchise to make such comparisons? A) benchmarks B) trends C) guidelines D) mutual strategies E

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