When Evaluating a Franchised Opportunity, Which of the Following Would

question 274

Multiple Choice

When evaluating a franchised opportunity, which of the following would you not find it necessary to do?

• A)Determine the territory of operation and whether it is an exclusive territory for the length of time of the franchise agreement.
• B)Avoid investigating the financial strength of the franchisor because it will be you who is making the money.
• C) Ask for sales and profit performance of similar franchises, and verify the information you received.
• D)Explore the market and the competition for same or similar products and services.

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Definitions:

Equilibrium Price

The price at which the quantity of a good or service demanded by consumers equals the quantity supplied by producers, leading to a state of market balance.

Number of Firms

It refers to the total count of enterprises operating within a certain market or industry.

Industry

A sector of the economy that produces a related set of goods or services.

Marginal Cost

The expense associated with the production of an extra unit of a product or service.