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

question 25

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 money

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Definitions:

Indirect Labor

The wages paid to employees who are not directly involved in the production of goods or services but support the manufacturing process, such as maintenance staff and supervisors.

Work in Process

Inventory that includes goods partially completed in the manufacturing process but not yet ready for sale.

Retained Earnings

The portion of net earnings not paid out as dividends but retained by the company to be reinvested in its core business or to pay debt.

Net Income Column

A financial statement element that shows the difference between total revenues and total expenses of a company.