Franchise Business Model Overview
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Questions and Answers

What is the franchise fee for Bayad Center for a duration of 5 years?

  • 120,000 pesos
  • 350,000 pesos (correct)
  • 130,000 pesos
  • 600,000 pesos
  • Which restaurant chain is categorized as fast-food according to the content?

  • Dunkin’ Donuts
  • Jollibee (correct)
  • Casual Dining
  • Culver’s
  • What is the minimum square meter requirement for setting up a Bayad Center?

  • 15 square meters (correct)
  • 20 square meters
  • 10 square meters
  • 25 square meters
  • Which of the following is NOT listed as a type of convenience store in the Philippines?

    <p>Anago Cleaning Systems</p> Signup and view all the answers

    What type of services does RE/MAX Phil. provide?

    <p>Real Estate Services</p> Signup and view all the answers

    What is the estimated cost of equipment needed to start a Bayad Center?

    <p>120,000 pesos</p> Signup and view all the answers

    Which franchise is listed as an example of health and beauty aids?

    <p>Great Clips</p> Signup and view all the answers

    What is the promised return on investment (ROI) time frame for Bayad Center?

    <p>2 years</p> Signup and view all the answers

    Which company did JFC acquire in 2019?

    <p>The Coffee Bean and Tea Leaf</p> Signup and view all the answers

    What type of cuisine does McDonald's primarily offer in the Philippines?

    <p>American</p> Signup and view all the answers

    How many different types of lotto games are mentioned in the content?

    <p>5</p> Signup and view all the answers

    Which pizza franchise has over 1,200 locations in the Philippines?

    <p>Pizza Hut</p> Signup and view all the answers

    What percentage of shares did JFC purchase in Milksha in 2021?

    <p>51%</p> Signup and view all the answers

    Which of the following offers franchising opportunities according to the content?

    <p>Shakey's Pizza</p> Signup and view all the answers

    Which company established a joint venture with Yoshinoya in 2021?

    <p>Jollibee</p> Signup and view all the answers

    Which type of products does 7-Eleven sell?

    <p>Convenience store items</p> Signup and view all the answers

    What is a key benefit for a franchisee in a franchising operation?

    <p>Access to the franchisor's knowledge and advertising clout</p> Signup and view all the answers

    Which of the following is NOT a major component of a franchise opportunity?

    <p>Completely free capital investment</p> Signup and view all the answers

    What does a franchise agreement typically allow the franchisor and franchisee to do?

    <p>Bring their particular strengths to the business arrangement</p> Signup and view all the answers

    What payment does the franchisee typically make to the franchisor on a regular basis?

    <p>Monthly or quarterly royalty fees</p> Signup and view all the answers

    Which statement accurately describes a franchisor?

    <p>They are individuals or businesses granting rights to a franchisee</p> Signup and view all the answers

    What is a franchisee granted access to under a franchise agreement?

    <p>Proprietary business knowledge and branding</p> Signup and view all the answers

    What is typically included in a franchisee's responsibilities?

    <p>Adhering to quality standards set by the franchisor</p> Signup and view all the answers

    What does the term ‘turnkey operation’ imply in franchising?

    <p>A fully equipped and operational business model provided by the franchisor</p> Signup and view all the answers

    What is a key benefit for a franchisee in a franchising relationship?

    <p>Established product or service</p> Signup and view all the answers

    Which of the following represents a disadvantage for franchisees in a franchising agreement?

    <p>Restrictions on ownership freedom</p> Signup and view all the answers

    What does a franchisor generally gain from entering into a franchising agreement?

    <p>Expansion opportunities without direct investment</p> Signup and view all the answers

    In a joint venture franchise, what is a common misconception about its nature?

    <p>It is often documented within a singular legal contract</p> Signup and view all the answers

    Which critical factor can affect the franchisor-franchisee relationship's success?

    <p>Mutually approved activities and communication</p> Signup and view all the answers

    Why might a franchisor choose to adopt a joint venture model?

    <p>To share risks and resources in a more balanced way</p> Signup and view all the answers

    Which of the following best describes the royalty fee in a franchising agreement?

    <p>A payment based on the franchisee's sales revenue</p> Signup and view all the answers

    What is a common expectation that may lead to failed outcomes in franchising?

    <p>Immediate profitability without sufficient marketing</p> Signup and view all the answers

    What type of restaurants fall under the midscale category?

    <p>Coffee lounges and restaurant buffets</p> Signup and view all the answers

    Which of the following is NOT included in the recreation, entertainment, and travel category?

    <p>Accounting firms</p> Signup and view all the answers

    Which option best defines business-format franchising?

    <p>A structured approach enforced by the franchisor</p> Signup and view all the answers

    What is the primary function of a franchisee?

    <p>To operate in accordance with the franchisor's guidelines</p> Signup and view all the answers

    Which statement about automotive products and services franchising is accurate?

    <p>They specialize in muffler replacements and minor car repairs.</p> Signup and view all the answers

    Which business opportunity approach is described as informal?

    <p>Business-opportunity approach</p> Signup and view all the answers

    What benefits are associated with midscale restaurants?

    <p>Affordable full meals perceived as good value</p> Signup and view all the answers

    Which of the following is a key factor in evaluating franchise opportunities?

    <p>Adaptability of the franchise model</p> Signup and view all the answers

    Study Notes

    Franchise Overview

    • A franchisee benefits from a turnkey operation which includes site selection, architecture, workflow, and customer service plans determined by the franchisor.
    • Franchising provides an avenue for individuals with limited capital and experience to achieve business success.

    Major Components of Franchising

    • Trademark or Logo: Grants franchisees the right to use the franchisor's brand.
    • Marketing Plan: Allows franchisees to sell products/services according to an established plan.
    • Royalty Fee: Franchisees pay an ongoing fee, typically a percentage of gross sales, which is often paid monthly or quarterly.

    Key Definitions

    • Franchisor: The entity that grants franchise rights and receives fees from franchisees.
    • Franchisee: The individual or business authorized to operate under the franchisor's brand.

    Notable Franchise Examples

    • The Coffee Bean and Tea Leaf: Acquired by JFC in 2019, offering various drinks.
    • Milksha: JFC purchased a controlling share in 2021.
    • Shakey's Pizza: Offers a strong franchise model in the pizza industry.
    • McDonald's: Largest franchise in the Philippines with over 650 locations serving American cuisine.
    • 7-Eleven: Leading convenience store franchise with diverse product offerings.
    • Convenience Stores: Includes brands like Ministop and Family Mart.
    • Pharmacy/Dugstores: Popular options include The Generics Pharmacy and Generika Drugstore.
    • Restaurants: Franchises range from fast-food (Jollibee, Burger King) to casual dining (Shakey's, Sizzler).

    Franchise Start-Up Considerations

    • Initial Fees and Investments: Bayad Center requires a cash bond and franchise fee, including additional costs for equipment and site restoration.
    • Minimum Space Requirements: Typically around 15 square meters for certain franchises.

    Franchise Types

    • Business-Format Franchising: Involves following a specific format dictated by the franchisor.
    • Joint Venture Franchising: Combines a franchise with a partnership, often leading to misunderstandings about legal rights and responsibilities.

    Advantages of Franchising for Franchisees

    • Established brand recognition and market presence.
    • Access to technical support and managerial assistance.
    • Standardized quality control and operational guidelines.

    Disadvantages of Franchising for Franchisees

    • Risk of unmet expectations and potential financial losses.
    • Ongoing service costs and operational fees.
    • Limited autonomy and decision-making power.

    Advantages of Franchising for Franchisors

    • Expands market reach and business presence through franchising.

    Considerations for Success in Franchising

    • Importance of evaluating both franchisor and franchisee situations before entering into an agreement.
    • Critical factors for success often lie in the dynamics of the franchisor-franchisee relationship.

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    Description

    This quiz explores the fundamentals of franchising, emphasizing the benefits and opportunities for small business owners. Learn about the relationship between franchisors and franchisees, including the turnkey operation concept and marketing advantages. Understanding these concepts is crucial for anyone interested in venturing into the franchise world.

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