How Does Franchising Most Likely Benefit a Franchisor

question 14

Multiple Choice

How does franchising most likely benefit a franchisor?

• A) protects the brand name and logo
• B) provides financial capital for growth
• C) provides knowledge to shareholders
• D) identifies the needs of niche markets
• E) protects the franchisor against economic risk

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Definitions:

Special Order

A customer request for a product or service that is not generally available or outside the business’s normal operations, often requiring special pricing or production considerations.

Capacity

The maximum level of output that a company can sustain to make a product or provide a service under normal conditions.

Activity-Based System

A method in accounting that allocates costs to specific activities based on their use of resources, aimed at providing more accurate cost information.

Non-Volume-Based Costs

Costs that do not vary directly with the volume of production or sales, often encompassing fixed costs like rent or salaries.