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Canadian Entrepreneurship & Small Business Management 5/e
Canadian Entrepreneurship & Small Business Management, 5/e
Wesley D. Balderson, University of Lethbridge
Franchising

Key Concept Quiz



1

The problem that Douglas Casimiri faced when managing his fish and chip franchises was:
A)Developing a long-term business plan
B)Motivation of employees
C)Locating interested franchisee owners
D)None of the above
2

Franchise growth in Canada has paralleled franchise growth in the United States.
A)True
B)False
3

A franchise agreement refers to:
A)A legal document of prearranged terms or conditions
B)A patent or trademark license
C)An agreement between franchisor and franchisee
D)All of the above
4

In this type of franchise, the manufacturer of a product grants a dealer the right to sell the product.
A)Manufacturer-retailer company
B)Wholesaler-retailer-directed franchise
C)Manufacturer-directed franchise
D)Franchising company
5

What franchise type relies on an initial start-up fee and ongoing royalties?
A)Manufacturer-retailer company
B)Wholesaler-retailer-directed franchise
C)Manufacturer-directed franchise
D)Franchising company
6

Michael Ford is interested in purchasing a grocery franchise. Which type of franchise will he likely be purchasing?
A)Manufacturer-retailer company
B)Wholesaler-retailer-directed franchise
C)Manufacturer-directed franchise
D)Franchising company
7

One should not be concerned with over-saturation of a franchise in an area because Canadian laws prevent this from occurring.
A)True
B)False
8

McDonald's, Kentucky Fried Chicken, Avis and Budget are all examples of:
A)Manufacturer-retailer company
B)Wholesaler-retailer-directed franchise
C)Manufacturer-directed franchise
D)Franchising company
9

Franchise agreements may include provisions to:
A)Provide training
B)Offer financing
C)Offer renewal options
D)All of the above
10

An advantage of purchasing a franchise is that one needs not be concerned with investigating the product, franchise concept or marketplace, as the franchisor has already done this.
A)True
B)False
11

_______ is an organization that may have valuable information about a franchisor's history, reputation, operations, size and number or operating franchises.
A)Canadian Franchise Association
B)Bank of Canada
C)Franchise Canada
D)CFIA
12

What are the characteristics of businesses that have franchise potential?
A)The business concept is clear and easy to teach
B)The business is not practical but fills a need
C)The business cannot be easily replicated
D)None of the above
13

What steps should Malcolm Pratt take to develop his "Pasta on the Go" franchise concept?
A)Establish a prototype
B)Develop a standardized program of operations
C)A and B
D)None of the above
14

After developing a franchise prototype, one should:
A)Investigate the legal requirements in setting up the franchise
B)Prepare the necessary information for prospective franchisees
C)Plan and standardize the program of operations
D)Immediately hire franchisees to iron out the bugs in the prototype
15

"Piggybacking" entails two or more franchises operating within one outlet.
A)True
B)False




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