Starbucks Owns and Operates Most of Its Retail Outlets; McDonalds

question 1

Multiple Choice

Starbucks owns and operates most of its retail outlets; McDonalds franchises most of its retail outlets.An advantage of franchising over vertical integration is:

• A)Franchising permits superior coordination of retail activities with upstream activities.
• B)Franchising subjects the operators of retail outlets being subject to "high-powered" incentives.
• C)Franchising permits more effective quality control of the retail outlet.
• D)Franchising is always more profitable than vertical integration because the franchisor does not bear the costs of owning the retail outlets and paying their staff.