Franchise Tutorials

Franchise Tutorials Quizzes

Franchise Tutorials - Practice Quiz

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1. One of the fundamental principles of franchising is:

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2. Franchising only exists in the fast food industry.

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3. Franchise fees are typically paid:

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4. A royalty ensures that the franchisor has a vested interest in your success. Your success results in their success.

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5. Deposit agreements:

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6. Deposits are non-refundable.

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7. Franchise systems are currently required by law to provide Disclosure Documents in:

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8. The Disclosure Document is only a summary of important information and is not a legal agreement.

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9. A franchisor uses royalty fees to:

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10. Royalty amounts are the same for every franchise system.

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11. Advertising fees range from:

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12. Advertising fees are not considered income of the franchisor.

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13. During initial training, new franchisees must:

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14. Costs for flights, accommodation, and meals are always covered by the franchise system.

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15. Ongoing training updates franchisees and their staff on:

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16. You may only receive ongoing training from your franchisor, not other educational sources.

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17. Operation manuals are:

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18. An operation manual cannot be changed or added to.

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19. In order for the Franchisee Advisory Council to be effective:

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20. A Franchisee Advisory Council can be an important part of a franchise system.

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21. The amount of inventory that franchisees are required to carry will:

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22. It's good practice to insure the entire inventory.

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23. Franchisors will regularly monitor approved suppliers through:

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24. In general, most Canadian franchisors use suppliers based in the US.

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25. Proper insurance allows you to recover from a financial loss during the occurrence of a specific event such as:

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26. All insurance needs are the same for all franchised businesses.

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27. Most franchise agreements will clearly state:

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28. As a franchisee, your employees work for you and not the franchisor.

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29. If you choose not to renew your franchise agreement:

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30. Upon renewal, your new franchise agreement may be substantially different from the original.

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31. Renewing your franchise agreement might require updates to:

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32. You and your staff might have to upgrade your training when you renew your franchise agreement.

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33. Territorial boundaries are defined in the franchise agreement and will often state that:

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34. Specific territory and protected area policies and terms should be outlined in the franchise agreement.

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35. The Master Franchisee Agreement provides the master franchisee with:

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36. Multi-unit, area development, or master franchisee agreements are similar in that they provide the licensee with the ability to generate revenues from multiple locations.

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37. Total occupancy costs for a leased space can include:

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38. In a head lease, the franchisee is in a direct contractual agreement with the landlord.

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39. Leasehold improvements:

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40. It always ends up being cheaper for a franchisee to lease a space with pre-existing leasehold improvements.

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41. There are benefits to regular franchisee reporting. They include:

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42. Franchisors require regular reporting from their franchisees because it is in everyone’s best interests to be aware of what is happening throughout the franchise system.

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43. The franchisor may also carry out operational audits on its location. Things that may be looked at during an operational audit include:

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44. Periodic audits, both financial and operational, play an important role in the success of any franchise system.

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45. The costs involved in mediation, arbitration, or a court case are paid for by:

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46. Going to court is the fastest and cheapest way to resolve franchisee-franchisor disputes.

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47. A default is:

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48. Franchise relationships can come to an end for a variety of reasons.

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Franchise Tutorials - Certificate Quiz

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1. From a franchisee perspective, franchising benefits by:

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2. Franchisors often don't welcome franchisee input.

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3. Ongoing royalty fees will vary from:

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4. An advertising fund is a government funding program to assist franchisors in developing advertising materials.

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5. From a potential franchisee perspective, deposits benefit by:

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6. There are no provincial legislations regulating franchise deposits.

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7. Disclosure Documents are provided to potential franchisees:

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8. The Disclosure Document will typically include a list of existing franchisees, with contact information.

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9. Royalties are often calculated based on:

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10. The benefits of royalty fees do not outweigh the costs.

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11. Advertising fees are calculated based on:

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12. Franchisees cannot request financial statements on how advertising fee dollars are spent.

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13. Initial training provides a franchisee with:

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14. As franchising is a business model, initial training is the same for every franchise system.

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15. There's often a correlation between the quality and thoroughness of ongoing training and:

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16. Ongoing training is also provided via Internet and video.

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17. A good set of operation manuals will:

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18. Operation manuals are typically not considered an obligation of the franchisor.

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19. A Franchisee Advisory Council is:

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20. Only top-performing franchisees are permitted to serve on Franchise Advisory Councils.

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21. The franchisor will usually have clearly defined policies regarding what products can be carried and:

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22. A strong franchise will often allow franchisees to purchase inventory at a lower cost than if they were an independent business.

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23. A strong franchise system will use approved suppliers to:

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24. Franchise systems will often permit franchisees to introduce new suppliers for review.

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25. Typically in a franchise agreement, or within the operation manual, there will be specific insurance requirements that you are obligated to have, including:

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26. A group plan with the franchise system is significantly lower in cost compared to individual coverage.

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27. The cost of employees goes beyond the paycheque. Some other costs are:

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28. Provincial Human Rights Codes prevent employers from discrimination when hiring and managing employees.

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29. You should give notice of your intent to renew your franchise agreement:

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30. The length of the Term of Agreement is always 10 years.

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31. The cost associated with renewing your franchise agreement:

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32. Some franchisors offer assistance or set a cap for the cost of these changes.

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33. The right of first refusal means:

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34. When exploring the possibility of opening a second location near a protected territory, the franchisor will usually conduct a study to determine the potential impact on sales of the existing location.

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35. An area developer is a franchisee who:

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36. A multi-unit franchisee must have the ability to work in the business rather than on the business by working in multiple locations at the same time.

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37. In a sublease arrangement, the franchisee:

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38. No matter which type of leasing arrangement is chosen, the franchisee should fully understand his or her legal and financial obligations as outlined in the lease agreement.

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39. When building out a new franchise location, a franchisee should:

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40. During build out of a new location, the franchisor will usually have the final decision on all aspects of the build, especially those relating to brand consistency.

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41. Most franchise agreements require franchisees to submit regular reports. These reports are usually:

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42. Franchisees are usually also required to submit reports and documentation to the government. What are some of these submissions?

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43. An audit is generally performed by a franchisor when a franchisee:

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44. When a franchisor conducts a financial audit on a franchisee, there is no allowance made for errors in accounting/reporting.

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45. The first method of dispute resolution a franchisee or franchisor should explore is:

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46. Mediation is a non-binding process, while the results of arbitration are binding.

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47. When selling your business and transferring the licence to a new franchisee:

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48. If your franchise agreement is terminated, you can open a competing business next door right away.

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