Which of the Following Aspects a Franchisee Must Consider Before

question 45

Multiple Choice

Which of the following aspects a franchisee must consider before signing the franchise agreement?

• A) Whether a new business aligns with his/her interest and skills
• B) Willing to invest the time in the day-to-day management of the new business
• C) Willing to invest capital to buy and run the franchise
• D) All of the above

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Definitions:

Gain

A financial gain occurs when the selling price of an asset exceeds its purchase price, resulting in a positive difference.

Indirect Method

The indirect method is a way of calculating cash flow from operating activities for the cash flow statement by adjusting net income for changes in non-cash accounts.

Operating Activities

The day-to-day actions that are involved in running a business, such as selling products, managing costs, and paying employees.

Depreciation Expense

The allocation of the cost of a tangible asset over its expected useful life to account for the loss of value over time.