Three Downsides to Buying a Franchise Include Initial High Costs

question 11

True/False

Three downsides to buying a franchise include initial high costs, the ongoing percentage-of-sales royalty fees, and the franchise requirements that, in effect, reduce the owner's independence.

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Definitions:

Consideration Received

The value obtained in exchange for goods or services offered, often represented in monetary terms but can include other forms of value.

Common Stock

A type of equity security that represents ownership in a corporation, with voting rights and the potential for dividends.

Fair Value

A valuation of an asset or liability determined by current market prices in active trading environments.

Treasury Stock

Shares that were once part of the circulating supply but were bought back by the company, thus reducing the amount of outstanding stock.