Which of the Following Is a Disadvantage of Franchising

question 55

Multiple Choice

Which of the following is a disadvantage of franchising?

• A) It doesn't ensure consistent product quality.
• B) It hinders companies ability to engage in global strategic coordination.
• C) It involves high development costs and risks.
• D) It enables the company to collect all the profits made by the franchisees.
• E) It frees companies from the task of monitoring and assisting operations at franchisees.

---

Definitions:

Nondiscriminating Pure Monopolist

A monopolist who charges all consumers the same price for its product or service, regardless of the market segment.

Marginal Revenue

The supplementary earnings obtained through the sale of one extra product or service unit.

Imperfectly Competitive Producers

Producers in a market structure where they have some control over the price of their products due to a lack of perfect competition.

Downsloping Demand Curves

A graph that illustrates the inverse relationship between the price of a good and the quantity demanded by consumers; as price decreases, the quantity demanded increases.