Which of the Following Statements Is a Disadvantage of Franchising

question 32

Multiple Choice

Which of the following statements is a disadvantage of franchising?

• A) The retailer bears all the loss.
• B) Heavy taxes are levied on the retailer.
• C) Local laws favor the franchise.
• D) The potential profit is reduced.
• E) This is the most expensive method of entering a new market.

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Definitions:

Long-Term Government Bonds

Debt securities issued by a government with a maturity of typically more than ten years, used to fund public expenditures.

Expected Return

The anticipated gain or loss from an investment over a period, considering both the probability of outcomes and the impact of different outcomes.

Portfolio

A collection of financial investments, such as stocks, bonds, commodities, or real estate, held by an individual or institution.

Slope of the Budget Line

The rate at which a consumer can trade off one good for another while maintaining the same level of utility, representing the relative prices of two goods.