In Franchising, Which of the Following Is Not a Benefit

question 158

Multiple Choice

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

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

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Definitions:

Equilibrium Price

The price at which the quantity of a good or service offered by sellers equals the quantity demanded by buyers, leading to a stable market condition.

Consumer Surplus

The difference between the total amount that consumers are willing and able to pay for a good or service and the total amount that they actually pay.

Producer Surplus

The difference between what producers are willing to accept for a good versus what they actually receive.

Ruby

A precious red gemstone made of corundum (aluminum oxide), prized for its color and brilliance.