Which of the Following Is the Primary Disadvantage of Franchising

question 44

Multiple Choice

Which of the following is the primary disadvantage of franchising as a foreign market entry strategy?

• A) It is usually a one-time activity.
• B) quality control
• C) A firm loses partial control of its business finances.
• D) high transportation costs
• E) The costs of setting up and maintaining a manufacturing facility and permanent presence in a foreign country can be high.

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Definitions:

Wage Rate

The standard amount of pay given to workers per unit of time (e.g., hour, day) for their labor.

Labor Supply Curve

A graphical representation showing the relationship between the wages offered and the quantity of labor workers are willing to supply.

Competitive Conditions

The state of a market characterized by a large number of buyers and sellers, leading to price competition and innovation.

Marginal Revenue Product

Marginal Revenue Product measures the additional revenue generated by employing one more unit of a factor of production, such as labor or capital.