The Power of Diversification
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Questions and Answers

Why is diversification important for a franchise portfolio?

  • To simplify the management of the franchise portfolio
  • To maximize profits from a single business
  • To minimize the number of franchises owned
  • To protect from serious loss if one business faces challenges (correct)
  • What is the suggested approach when growing a franchising portfolio?

  • Randomly selecting franchise brands for diversity
  • Focusing solely on concepts within the same industry
  • Choosing concepts strategically based on passion and market knowledge (correct)
  • Avoiding adding concepts in different industries to reduce volatility
  • What is a potential benefit of adding concepts in different industries to a franchise portfolio?

  • Increasing the complexity of managing the portfolio
  • Adding further income and stabilizing the portfolio (correct)
  • Reducing the need for applying business acumen and market knowledge
  • Raising the risk and volatility of the portfolio
  • Why is the post-pandemic period considered an ideal time to diversify and grow a franchise portfolio?

    <p>To take advantage of the disruption and apply business acumen to another brand</p> Signup and view all the answers

    What is the analogy used to emphasize the importance of diversification in a franchise portfolio?

    <p>Keeping a portfolio of different stocks to diversify investments</p> Signup and view all the answers

    Franchise diversification is not necessary in a post-pandemic world.

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

    It is advisable to randomly select franchise brands when growing your portfolio.

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

    Adding concepts in different industries to a franchise portfolio can reduce volatility and risk.

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

    It is not important to follow your passion when choosing franchise concepts.

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

    The disruption brought on by the pandemic makes it a risky time to diversify and grow a franchise portfolio.

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

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