The Most Significant Disadvantage to Franchising as a Means of Acquiring

question 88

Multiple Choice

The most significant disadvantage to franchising as a means of acquiring a business is

• A) the amount of paperwork.
• B) the absence of economies of scale.
• C) high start-up costs.
• D) government regulation.
• E) low break-even points.

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Definitions:

Production Overruns

Occurrences when more units of a product are produced than were originally ordered or forecasted, often leading to excess inventory.

Service Retailer

A business that sells services rather than physical goods, providing intangible products to customers.

Nail Salon

A specialized beauty salon that provides nail care services such as manicures, pedicures, and nail enhancements.

Extreme-value Retailers

Stores that specialize in offering a wide range of products at exceptionally low prices, targeting cost-conscious consumers.