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Exam 5: Small Business, Entrepreneurship, and Franchises

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Question 41

Multiple Choice

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All of the following are disadvantages to the franchisee except

A) a loss of control.
B) continuing royalty fees.
C) hard work.
D) a fee for advertising.
E) starting a business with limited capital.

F) None of the above
G) A) and B)

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Question 42

Multiple Choice

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Which of the following is not considered a category in the distribution industries?

A) Manufacturing
B) Wholesaling
C) Retailing
D) Transportation
E) Communications

F) D) and E)
G) None of the above

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Question 43

Multiple Choice

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By age 26, Tom was a plant manager in the snack-foods division. By 33, he headed the division, one of the most profitable in the corporation. Eventually, however, the company decided to move its corporate offices. Although he loved the job and thought the work was great, Tom's lifestyle was awful. He was on the road so often that he was giving up much of his family life. Tom had also become disenchanted with corporate life. He saw that the closer one got to the top, the more vulnerable one's position became. Thus, Tom left the corporation to start his own snack-foods company. His thoughts and actions most clearly reveal his

The various types of businesses attracting small business are generally grouped into service industries, distribution industries, and financial industries.

Approximately how many businesses are there in the United States?

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

Small businesses have traditionally added ____ new jobs to the economy.

Give examples to support the statement, "There must be some motivation to start a business."

Some franchisors claim that contracts are unfairly tilted toward the franchisees.

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

Personal Wellness Angela has been working for a local small business called Personal Wellness for the last three years. It is a retail business that sells sporting goods equipment. When she started her job, she noticed several things as causes of the business not doing as well as the owners were expecting. Angela has been thinking of starting her own small business because she feels she has learned a great deal through working for Personal Wellness. Due to her education, attention to detail, and organization skills, Angela's manager asked her to create a business plan for Personal Wellness. The manager hoped that this plan would help organize, structure, and focus the business. As part of the plan, Angela suggested that Personal Wellness contact a group of senior and graduate students to provide management counseling for the company as she is concerned that her leaving the company may be detrimental to the slow, but forward, progress that the company is making and her connection with the owners is strong. Angela's most immediate concern is keeping the business from failing. -Refer to Personal Wellness. Personal Wellness can be classified as operating in what type of industry?

Which of the following statements is true?

How can small businesses challenge larger, established firms?

Doug 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 does it mean to have an entrepreneurial spirit?

All of the following are advantages to the franchisor except

Sarah owns a 7-Eleven franchise. What is the primary disadvantage of owning a franchise for Sarah?

What is a business plan? What are its components? Why is it so important?

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

The SBA places special emphasis on aid to