In Franchising, Which of the Following Is Not a Benefit

question 104

Multiple Choice

In franchising, which of the following is not a benefit that the franchiser gains?

• A)The franchiser can gain more rapid product distribution.
• B)The franchiser can acquire capital more quickly for expanding production.
• C)The franchiser gains more control over how the franchisees operate the establishments.
• D)The franchiser benefits from the fact that franchisees tend to be highly motivated to succeed, which in turn leads to higher sales and higher royalties.
• E)All of these are benefits for the franchiser.

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Definitions:

Equilibrium Price

The rate at which the volume of goods available meets the volume of goods sought.

Surpluses

The amount by which supply exceeds demand, often referring to goods, services or public finances.

Shortages

A situation where the demand for a product or service exceeds the supply available at a specific price.

Price Floor

A government- or authority-imposed minimum price set above the equilibrium price, preventing sellers from trading at lower prices.