Franchising Refers to

question 274

Multiple Choice

Franchising refers to

• A)contractual agreement between multiple retailers sharing the same business mission to operate in a consistent, lock-step method not only to achieve enhanced buying power, but to increase customer recognition and loyalty.
• B)a joint venture between a parent company (a franchisor) and an individual or firm (a franchisee) that allows the franchisee to operate a certain type of business under an established name and according to specific rules.
• C)purchasing the name, branding, and raw materials from one organization and transferring it to another.
• D)a practice whereby one firm's marketing channel is used to sell another firm's product.
• E)selling an idea to a larger company and letting them do all the manufacturing, distribution, and marketing.

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Definitions:

Concentration Ratio

A measure of the total output produced in an industry by a given number of firms, used to assess the level of market concentration and competition.

Corporate Concentration

The degree to which a small number of firms control a large market share of the total output or sales within an industry.

Herfindahl-Hirschman Index

A measure of market concentration to evaluate the competitive landscape, calculated by summing the squares of the market shares of all firms in the industry.

Herfindahl-Hirschman Index

A measure of market concentration and competition, calculated by squaring the market share of each firm competing in a market and summing the resulting numbers.