Question

Which of the following is an advantage of franchising? a. It allows the franchisor to earn all of the profits made by franchisees. b. It is beneficial for franchisees because they do not have to face higher capital costs. c. It can help the franchisor expand his or her business rapidly. d. It gives the franchisor the same level of tight control over franchisees as does chaining. e. It helps the franchisees by relieving them of the responsibility of running operations.

Answer 1

Answer:

c. It can help the franchisor expand his or her business rapidly.  

Explanation:

Franchising refers to a type of business in which a commodity or method owner (franchisor) gets distribution via affiliated firms or traders (franchisees) with the aim of expanding the business of the franchisor.

Under franchising, the franchisor gives to the franchisee a kind of licence which gives the franchisee access to method, trademarks, and proprietary knowledge of the franchisor so that the franchisee can sell a commodity under the name of the franchisor’s business.

Therefore, an advantage of franchising is that it can help the franchisor expand his or her business rapidly as it is often adopted by franchisor as a business expansion strategy.