Which of the Following Is a Disadvantage of Franchising

question 29

Multiple Choice

Which of the following is a disadvantage of franchising? 

• A) ​Franchisors face tariff and nontariff barriers when trying to enter a market. 
• B) ​Franchisors face a loss of control when they sell businesses to franchisees who are thousands of miles away. 
• C) ​Franchisors give up control over the quality of a product or service sold by foreign licensees. 
• D) ​Franchisors can eventually become competitors, especially when a licensing agreement includes access to important technology or proprietary business knowledge.

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Definitions:

Current Liabilities

Short-term financial obligations that are due within one fiscal year or the operating cycle, whichever is longer.

Refinancing

The process of replacing an existing loan with a new loan, typically with better terms, to improve financial outcomes.

Long-Term Investment

An asset purchased with the goal of holding the investment for a period typically exceeding one year, often to generate revenue over time or appreciate in value.

Current Liabilities

A company's debts or obligations that are due to be paid to creditors within one year.