SOLVED

31) Company X, a franchisor, used franchisees to build the Company X brand and the company system. Now that Company X is large and successful, it is using pricing tactics and restrictive contract terms to force franchisees to sell their franchises back to Company X. Which term best describes the actions of Company X? A) free riding B) negligent franchising C) opportunistic licensing D) redirection of ownership E) organizational consolidation 32) According to the text, a franchise system that is ________ old has the greatest chance of success. A) 6 months B) 1 year C) 2 years D) 3 years E) 4 years 33) Why does goal incongruity most likely exist between franchisors and franchisees? A) Franchisors want compliance, and franchisees want innovation and flexibility. B) Franchisors seek to maximize sales, and franchisees seek to maximize profits. C) Franchisors want open communication, and franchisees want full autonomy. D) Franchisors seek to maximize profits, and franchisees seek to maximize sales. E) Franchisors want innovation and flexibility, and franchisees want compliance. 34) Which term refers to building too many stores close to each other and undermining their ability to earn profits? A) segmentation B) fragmentation C) plural formation D) cannibalization E) expansionism 35) Which of the following refers to a franchisee that owns many outlets and has an organizational structure that mimics the franchisor’s structure? A) licensed B) multi-unit C) single-unit D) plural form E) business format 36) What is LEAST likely an advantage of franchise systems that include both company-owned outlets and franchisees? A) testing new ideas B) training employees C) refining business formats D) enforcing contract requirements E) motivating both sides to improve 37) Which of the following would LEAST likely be addressed in a franchise contract? A) organizational structure B) territorial exclusivity C) terms of renewal D) marketing strategy E) intellectual property protection 38) According to the text, franchising in the U.S. was primarily developed by which company? A) Coca-Cola Company B) Ford Motor Company C) Standard Oil Company D) Singer Sewing Machine Company E) McCormick Harvesting Machine Company 39) What is a competitive advantage of franchising? A) attracting new customers B) focusing on a branded concept C) forming long-term contracts D) developing multiple products E) separating channel functions 40) A franchisee engaging in opportunistic holdup with a franchisor would most likely ________, A) demand tie-in sales B) request lower royalties C) negotiate for rent relief D) invest in equipment E) share profits 41) In a franchising arrangement, the franchisee acts as a separate business entity but is required to return all of its profits to the franchisor. 42) Franchising is a fast growing form of retailing especially in the retail sectors of Europe and the U.S. 43) Franchisors benefit from a franchisee’s entrepreneurial spirit and knowledge of the local market. 44) Annual profits serve as the best tool to assess franchisee performance because profits can be readily observed and verified, unlike sales, which are difficult to measure. 45) A plural form strategy is more effective when franchisors monitor their own units using m