The Advantages of Using a Franchising Strategy to Pursue Opportunities

question 15

Multiple Choice

The advantages of using a franchising strategy to pursue opportunities in foreign markets include

• A) having franchisees bear most of the costs and risks of establishing foreign locations and requiring the franchisor to expend only the resources to recruit,train,and support foreign franchisees.
• B) being particularly well suited to the global expansion efforts of companies with multicountry strategies.
• C) helping build multiple profit sanctuaries.
• D) being well suited to companies that employ cross-market subsidization.
• E) being well suited to the global expansion efforts of manufacturers.

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Definitions:

Operating Profit

The profit earned from a firm's normal business operations, calculated before interest and taxes.

Operating Segments

Aspects of a business for which individual financial details are accessible and are consistently reviewed by the principal operating decision maker for the purposes of resource distribution and performance assessment.