An Advantage of Licensing and Franchising Is the Low Development

question 31

True/False

An advantage of licensing and franchising is the low development costs and risks.

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Definitions:

Fixed Costs

Expenses that do not change with the level of production or sales, such as rent, salaries, and insurance.

Variable Costs

Costs that vary directly with the level of production or sales volume, such as raw materials and direct labor.

Net Operating Income

The profit generated from a company's everyday business operations, calculated by subtracting operating expenses from the gross income.

Budgeting

The process of creating a financial plan for a defined period, usually a year, which includes revenue forecasts and expense allocations.