Identify an Accurate Statement About Franchising

question 24

Multiple Choice

Identify an accurate statement about franchising.

• A)A franchisor enables a rapid expansion while maximizing the funds invested in that expansion.
• B)Specific information on the profitability of individual franchises does not have to be shared with the franchisor.
• C)An entrepreneur spends more of his or her resources than if he or she had to start a new business from scratch.
• D)A franchisor continues research and development on the products and processes that a small single business cannot afford to pursue.

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Definitions:

Direct Expense

Costs that can be directly tied to the production or sale of specific goods or services.

Indirect Expense

Costs that are not directly tied to a specific product or service, such as utilities or rent for a company.

Insurance

A financial product that provides protection against losses or damages, in exchange for premium payments.

Departmental Income Statement

An income statement that shows the financial performance of different departments within a company.