A Major Potential Problem Associated with Franchising for the Franchisor

question 1

Multiple Choice

A major potential problem associated with franchising for the franchisor is that _____.

• A)money is obtained when goods are delivered,rather than when they are sold
• B)franchisees as owners have less incentive to work hard than employees
• C)it is difficult to set up and enforce franchise qualifications
• D)poorly performing franchises can undermine both consumer and investor confidence

---

Definitions:

Double Counting

A statistical or accounting error where a transaction or value is counted more than once, skewing results.

Parent

A company that controls or owns another company or companies.

Subsidiary

A company that is completely or partially owned and controlled by another company, known as the parent company.

Identifiable Asset

An asset that can be separated and sold, transferred, or licensed, and has a clear value or benefit to the business.