Why Would a Franchise System Monitor Its External Environment

question 9

Multiple Choice

Why would a franchise system monitor its external environment?

• A)to identify factors which may pose major threats to or provide significant opportunities for the franchise system.
• B)to develop a set of objectives to fit the mission and overall goals of the franchise system.
• C)to concentrate resources outside of the firm more than inside of the firm.
• D)to second-guess what its suppliers intend to do next.

---

Definitions:

Limited Liability

A legal structure that limits each owner's personal liability to the amount invested in the business.

Share Transferability

The ease with which shares of a company can be transferred or sold from one party to another.

Paid-In Capital in Excess of Par

The amount of capital received from investors for stock, above its par value, also known as additional paid-in capital.

Preferred Stock

A type of stock that gives holders priority over common stockholders in terms of dividend payments and claims on assets in the event of liquidation.