In Franchising, Which of the Following Is Not a Benefit

question 31

Multiple Choice

In franchising, which of the following is not a benefit that a franchiser gains?

• A) A franchiser can gain more rapid product distribution.
• B) A franchiser can acquire capital more quickly for expanding production.
• C) A franchiser gains more control over how franchisees operate establishments.
• D) A franchiser benefits from the fact that franchisees tend to be highly motivated to succeed, which in turn leads to higher sales and higher royalties.
• E) All of these are benefits for a franchiser.

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Definitions:

Specific Customer

A particular or individual client to whom products or services are sold or provided.

Allowance Method

An accounting technique that estimates and deducts accounts receivable that may not be collectible, to more accurately represent a company's financial position.

Net Realizable Value

The estimated selling price of goods minus the cost of their sale or disposal, used in valuing inventory to reflect the net amount that can be realized.

Allowance for Doubtful Accounts

An estimation of future uncollectible amounts from customers, reducing the accounts receivable balance to a more realistic figure.