The Advantages of Using a Franchising Strategy to Pursue Opportunities

question 49

Multiple Choice

The advantages of using a franchising strategy to pursue opportunities in foreign markets include

• A)having franchisees bear most of the costs and risks of establishing foreign locations and requiring the franchisor to expend only the resources to recruit, train, and support and monitor franchisees.
• B)being particularly well-suited to the global expansion efforts of companies with multidomestic strategies.
• C)allowing a company to achieve scale economies.
• D)being well suited to companies who employ cross-border transfer strategies.
• E)being well suited to the global expansion efforts of manufacturers.

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Definitions:

Budgeted Overhead Cost

The estimated cost of overhead for a future period, used in budgeting and planning processes.

Variable Overhead Costs

Expenses that change with the level of production or business activity, including costs like utilities and indirect materials.

Planning Budget

A budget prepared for a specific level of activity, outlining expected revenues, expenses, and resource requirements.

Employee Salaries

Regular payments made to employees for performing their job duties.