What is a primary distinction between a merger and a joint venture?

Joint ventures often lead to new businesses for specific projects.

What might be a challenge faced by co-operatives in terms of management?

Elected managers may be ineffective due to lack of business understanding

What does a franchiser receive in exchange for letting someone use their well-known brand name for a business?

Both an initial fee and royalty payments

Jason recently invested in opening a "Burger Bliss" franchise in his hometown. What might be the biggest advantage?

He got comprehensive training and resources.

What can lead to a conflict between the franchiser and franchisee?

A disagreement regarding marketing support or product training.

Why might a business want to pursue external growth?

To diversify into new markets and spread risk.

What differentiates a strategic alliance from a joint venture?

Alliance co-operates; joint venture forms company.

What is a co-operative?

A business that is owned, run by members and profits are shared among them.

Which of the following represents an advantage for the franchisee?

The franchisee can use a tried-and-tested brand name.

What advantage does the franchiser have in terms of expenses?

No need to spend large amounts, potentially avoiding debt, to expand.

Which of the following is NOT an advantage of a co-operative?

Co-operatives require a large initial capital from external investors.

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IBM I: Franchises, Cooperatives and Business Growth

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Answers

1
What is a primary distinction between a merger and a joint venture?
A merger involves two companies from the same country.
Joint ventures often lead to new businesses for specific projects.
Mergers always result in a new company name.
In a joint venture, there is a change of ownership between the companies.
2
The control the franchiser has over the product is not as great as if the business sold the product itself
False
True
3
What might be a challenge faced by co-operatives in terms of management?
Elected managers may be ineffective due to lack of business understanding
There is always a clear distinction between member and management roles.
Managers are always overqualified.
Managers have unlimited power and decision-making authority.
4
What does a franchiser receive in exchange for letting someone use their well-known brand name for a business?
Both an initial fee and royalty payments
No monetary compensation, just brand recognition
Royalty payments only
A one-time initial fee only
5
Jason recently invested in opening a "Burger Bliss" franchise in his hometown. What might be the biggest advantage?
"Burger Bliss" doesn't require any monthly fees.
He got comprehensive training and resources.
He received a free restaurant location.
He can set any menu prices he wants without approval.
6
What can lead to a conflict between the franchiser and franchisee?
The franchiser provides too much training.
High profits from the franchisee's side.
A disagreement regarding marketing support or product training.
The franchiser and franchisee have similar brand images.
7
Why might a business want to pursue external growth?
To limit their return on investment.
To diversify into new markets and spread risk.
To avoid any form of economies of scale
To decrease the entrepreneur's challenges.
8
What differentiates a strategic alliance from a joint venture?
Alliance creates a new company.
Joint ventures last longer always.
Alliance co-operates; joint venture forms company.
Only one party benefits in alliances.
9
What is a co-operative?
A business that donates all of its profits to charity.
A business where the primary focus is on maximizing short-term profits.
A business where only a few shareholders benefit.
A business that is owned, run by members and profits are shared among them.
10
Why might businesses engage in a joint venture?
No legal responsibilities.
Only for construction projects.
Guaranteed equal profits.
Share high capital costs.
11
Which of the following represents an advantage for the franchisee?
The franchisee must buy all supplies from the franchiser.
The franchisee has unlimited control over their operations.
The franchisee doesn't need any market research.
The franchisee can use a tried-and-tested brand name.
12
What advantage does the franchiser have in terms of expenses?
The franchiser needs to spend large amounts of money for branding.
No need to spend large amounts, potentially avoiding debt, to expand.
The franchiser has to support the franchisee financially
The franchiser always gets the cheapest supplies.
13
Which of the following is NOT an advantage of a co-operative?
Members are usually loyal and supportive.
Establishing a co-operative is legally straightforward.
The liability for members is usually limited.
Co-operatives require a large initial capital from external investors.

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