Franchising Is a Commonly Used Method for a Hospitality Entity

question 31

True/False

Franchising is a commonly used method for a hospitality entity to increase its distribution network, both to create more revenue and to obtain geographic presence.

---

Definitions:

Face Value

The nominal value stated on financial instruments, such as bonds or stock certificates, representing the amount to be repaid at maturity.

Contract Rate

The predetermined price per unit of service or good agreed upon in a contractual agreement.

Market Rate

The prevailing rate of interest or value for currencies or goods in the marketplace, often influenced by supply and demand.

Effective Interest Rate Method

A technique used in finance to find the actual interest rate per period with compounding taken into account.