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Exam 5: Small Business, Entrepreneurship, and Franchises

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Question 31

True/False

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An agreement between two franchisors in which the two franchisors offer their products together is called double franchising.

A) True
B) False

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Question 32

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You have decided to open a pet store and have engaged in a contract with Dog & Cat Centers, Inc. You and the company have drawn up an agreement that allows you to use the company's name and its proven method of doing business, to receive training, and to use its advertising materials. In this agreement, Dog & Cat is the ____ and you are the ____.

A) entrepreneur; corporation
B) franchisor; franchisee
C) employee; employer
D) entrepreneur; local chain
E) corporation; manager

F) A) and C)
G) A) and E)

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Question 33

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What do small businesses as a group contribute to the U.S. economy?

Many entrepreneurs lack the management skills required to run a business.

Small businesses operate only in the service industry, not in manufacturing.

Nathan's business constructs storage sheds for new housing developments as requested by the builders. Nathan's business would best be classified as a

Economically, the U.S. government is not concerned with whether or not small businesses make it.

Penicillin, airplanes, and air conditioning were all

What are the disadvantages of owning a small business?

What is a franchise? What are the major types of franchising arrangements?

Which of the following would most likely be classified as a distribution industry?

Before seeking financial backing for his new business, Tyler puts together a concise document explaining the nature, mission, and goals of his new business and its expected costs and potential. Tyler has constructed a(n)

About one-third of franchised businesses fail during the first two years of operation.

Mc-King Chicken Brian decided to open a local franchise of the well-known Mc-King Chicken, a fast-food restaurant. Before he took the initiative to open the franchise, he tried to weigh all the advantages and disadvantages. He decided, based on his research and understanding, that it would be beneficial to open a local fast-food restaurant. Mc-King has become quite successful domestically, and now it is exploring the possibility of opening franchises internationally. The company hired an international agency to help it learn what and what not to do. After the agency met with the managers of Mc-King a few times, the Mc-King management decided it would go ahead with its decision to expand internationally. -Refer to Mc-King Chicken. Which of the following would not be an advantage of a franchise?

John and Ruby Couch just opened a computer store in a small community. Before opening the store, they listened to their SBA counselor's warnings about the importance of having balanced experience―that is, marketing, finance, and personnel experience―in the computer-store business because

What do franchisees typically have to pay to the franchisor?

A small business is all of the following except

For those who like dealing with people, small business is the place to be.

In a franchise, the franchisee gets the opportunity to start a business with limited capital and to make use of the business experience of others.

In the past, the SBA could guarantee loans up to $5 million.