Three Major Reasons That Explain Why Franchisors Distribute Via Franchise

question 27

Multiple Choice

Three major reasons that explain why franchisors distribute via franchise channels are:

• A) (1) reduce uncertainty; 2) obtain training; and 3) obtain assistance from franchisee.
• B) (1) capital advantages, 2) potential to reduce distribution costs, and 3) possible high level of managerial motivation fostered by franchising.
• C) (1) capital advantages, 2) obtain training; and 3) obtain assistance from franchisee
• D) (1) capital advantages, 2) potential to reduce distribution costs, and 3) obtain assistance from franchisee.
• E) (1) reduce uncertainty; 2) obtain training; and 3) possible high level of managerial motivation fostered by franchising.

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Definitions:

Monopolistic Competition

A market structure characterized by many firms offering products that are similar but not identical, leading to competitive pricing and product differentiation.

Monopoly

A market structure characterized by a single seller selling a unique product in the market.

Product Differentiation

The technique of setting a product or service apart from competitors to enhance its appeal to a distinct target audience.

Long-run Profits

Earnings achieved over an extended period, where all inputs can be adjusted by firms, reflecting the company's ability to adapt and reoptimize operations.