The Most Significant Disadvantage to Franchising as a Means of Acquiring

question 88

Multiple Choice

The most significant disadvantage to franchising as a means of acquiring a business is

• A) the amount of paperwork.
• B) the absence of economies of scale.
• C) high start-up costs.
• D) government regulation.
• E) low break-even points.

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Definitions:

Fair Value

An estimate of the market value of an asset or liability, based on current prices in an active market.

Undervalued

Refers to an asset or company being priced below its perceived true value based on financial metrics or future potential.

Overvalued

A situation where a security or asset is trading at a price exceeding its intrinsic value.

Additional Paid-In Capital

The amount of money investors have paid for shares in a company above the stated par value of those shares.