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Exam 5: Small Business,Entrepreneurship,and Franchises

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Question 41

True/False

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There is much less likelihood of failure with a franchised outlet than with an independently owned small business.

A) True
B) False

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Question 42

Multiple Choice

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At the age of 16,Jacek knew several professional skiers who were given several sets of skis and extra ski gear by their promotors.They did not use the extra skis and gear because they had all they could use.He contacted the skiers and offered to buy the extra skis and gear from them.He then sold the skis and ski gear to individuals who picked it up from him at mutually agreed-upon locations.Eventually he had enough money to buy a car which he used to transport the goods.When he had enough money to buy a building,he bought a small building on a busy street and made it into a sporting goods department store.When he had enough money saved to import goods from other countries,he added these to his sporting goods offerings.He invested his profits in energy stocks which returned a large gain and gave him the ability to start other businesses.By the age of twenty-five,Jacek was a millionaire.In a recent interview,Jacek said he will never work for someone other than himself and has wanted to have his own business all of his life.Which of the following best describes Jacek?

A) Jacek is an employee.
B) Jacek is an entrepreneur.
C) Jacek is an investor.
D) Jacek is the owner of a home-based business.

E) All of the above
F) B) and D)

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Question 43

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Harold had a hobby training dogs to do tricks.To prove his skill in dog training,he adopted a dog from the local shelter that had been labeled "incorrigible." Harold trained the dog to be totally obedient and to perform several tricks.He took the dog back to the shelter to give a show for the employees there and to let them know that no dog is incorrigible,they are just poorly trained.The employees were so amazed that they asked him for contact information so they could refer other shelter dog adopters to him to have their dogs trained.Harold had business cards printed,set up a Facebook page,a webpage,and a Twitter account,where he posted short videos of dogs doing tricks,participating in dog shows,and readily obeying their owners.He also posted tips for dog care.The referrals,webpage,and social media sites generated so much business in six months that his wife quit her job to work for him.A year later,he hired his sister-in-law to work for him.The following year he hired and trained two more employees.His business now generates income of $2 million/year and he is considering opening in other locations.Which of the following is true about Harold's business?

A company generally needs more than ____ employees in order to be considered large.

There are three general types of franchising arrangements.In one approach,the franchisor authorizes retailers to sell a particular brand-name item.This type of arrangement is common in all of the following areas except

Eduardo has always wanted to operate his own fast-food restaurant,but he knows the high failure rate of restaurants.To increase his chances of success,he should consider

What organization created by Congress in 1953 assists,counsels,and protects the interests of small businesses?

To qualify as a small business,a retailing establishment may not exceed annual sales of

What is the primary reason that so many new businesses fail?

Some advantages of the sole proprietorship also apply to the small business.

Why do certain industries tend to be more attractive for the start-up of a small business?

In the early days of franchise agreements,franchising was used primarily for automobile dealerships and

A main disadvantage of a small business is that employees and customers usually develop too close of a relationship.

What is the most popular course offered by the SBA?

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

Large firms generally buy parts and assemblies from smaller firms because

Businesses are generally placed into three broad categories: service industries,production industries,and ____ industries.

SCORE is a group of retired businesspeople who volunteer their services to small businesses through the SBA.

A new small business,Underwater Wildlife,has opened to sell tours of underwater sites around the country and in South America.However,money has to be paid up front by the Underwater staff to book hotels and other travel arrangements before its clients have paid for the tours.That means Underwater is facing a potential

All franchisors give geographical protection to their franchise holders.