According to the Textbook, from the Franchisor's Point of View

question 19

Multiple Choice

According to the textbook, from the franchisor's point of view, the primary disadvantage of franchising is that:

• A) it is not legal in 11 states
• B) an organization allows others to profit from its trademark and business method
• C) franchise organizations consistently makes less money than alternative forms of business ownership
• D) it typically takes longer to grow an organization via franchising than company-owned stores
• E) the franchisees, rather than the franchisor, typically makes most of the money

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Definitions:

Statement Of Financial Affairs

A document detailing a company's assets, liabilities, and equity at a specific point in time, often used in bankruptcy proceedings.

Pledged Assets

Pledged assets are those items of value that are pledged as collateral for a loan or obligation, securing the repayment of the loan by providing the lender rights to the collateral in case of default.

Net Realizable Value

The estimated selling price in the ordinary course of business minus estimated costs of completion and applicable selling expenses.

Unsecured Non-priority Creditor

This type of creditor has a claim against the debtor that is not backed by collateral and does not have priority in bankruptcy proceedings.