Which of the Following Statements Is FALSE

question 36

Multiple Choice

Which of the following statements is FALSE?

• A) Franchising is most appropriate in fragmented industries.
• B) Franchising provides corporate growth with less risk than do mergers and acquisitions.
• C) Successful franchising allows transfer of knowledge and skills from the franchisor to the franchisee.
• D) Franchising agreements require more trust between firms than do other cooperative strategies.

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Definitions:

Activity Level

A metric indicating the volume or intensity of operations in a company, affecting its costs and resources.

Fixed Overhead

A set of costs that do not change with the level of production or sales, such as rent, salaries, and insurance.

Budget Variance

Budget variance is the difference between budgeted or planned financial performance and the actual performance, indicating whether a business is over or under its budgeted amount.

Budgeted Overhead

An estimated cost for indirect expenses related to operations that a company or project is expected to incur over a specific period.