BUSINESS ADMINISTRATION
ENTREPRENEURIAL DEVELOPMENT
|
Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
|
|
|
Franchisee is the seller
|
|
|
Franchisor pays royalties as fees
|
|
|
Franchisee provides continuous support
|
|
|
Franchisee lacks freedom
|
Detailed explanation-1: -The franchise agreement usually includes restrictions on how you can run the business. You might not be able to make changes to suit your local market. You may find that after some time, ongoing franchisor monitoring becomes intrusive. The franchisor might go out of business.
Detailed explanation-2: -Disadvantages to franchisees include high costs and royalty payments, strict product rules, lack of support from uninterested franchisors, lack of flexibility in where to locate and how to trade, and other start-up challenges.
Detailed explanation-3: -E) In a franchising business, if the franchisee has their operating freedom restricted they will have to follow the product standards as suggested by the franchise, follow their operating rules, confirm their facilities design, and must function only in a defined area or territory.