Which of the Following Exemplifies an Opportunistic Behavior by a Franchisor

question 63

Multiple Choice

Which of the following exemplifies an opportunistic behavior by a franchisor arising out of incompleteness or ambiguity in a contract?

• A)Providing inferior service in an attempt to cut operating costs.
• B)Terminating a well-operated franchisee and converting the establishment into a profitable company-owned outlet.
• C)Fixing exorbitant prices for products having relatively elastic demand.
• D)Terminating a franchisee who had been using the company brand name to endorse products that the agreement says it cannot.

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Definitions:

MAD

Mean Absolute Deviation, a statistic that measures the average absolute deviation of observed values from their mean.

MSE

Mean Squared Error (MSE) is a measure used in statistics to quantify the average of the squares of the errors or deviations between estimated and actual values.

MAPE

Mean Absolute Percentage Error, a measure used to assess the accuracy of forecast models by calculating the average absolute percent error between predicted and observed values.

Exponential Smoothing

A forecasting technique that applies decreasing weights to past observations as they become older to predict future values.