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:

Owner's Drawings

Withdrawals made by the owner from the business for personal use, considered as a reduction in the equity.

Owner's Capital

The amount of money and assets invested in a business by its owner, minus any withdrawals.

Net Income

The residual financial gain of a business following the deduction of every expense, tax, and cost from its total revenue.

Accounting Cycle

The collective process of recording and processing the accounting events of a company, culminating in the production of financial statements within a specific period.