Small Business Management
Test Questions
Course Introduction
Small Business Management examines the principles and practices required to successfully start, operate, and grow a small business. The course covers key topics such as business planning, financing, marketing strategies, legal and regulatory considerations, human resource management, and operations. Students will analyze case studies and practical scenarios to gain insight into overcoming common challenges faced by entrepreneurs and small business owners. Emphasis is placed on critical thinking, problem-solving, and decision-making skills necessary for sustainable business success in a competitive environment.
Recommended Textbook
Franchising 4th Edition by Richard J. Judd
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22 Chapters
209 Verified Questions
209 Flashcards
Source URL: https://quizplus.com/study-set/1324
Page 2
Chapter 1: Franchising: History and Overview
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10 Verified Questions
10 Flashcards
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Sample Questions
Q1) Probably the earliest example of franchising in the United States is most likely to be:
A)Kentucky Fried Chicken
B)McDonald's
C)Western Auto
D)McCormick Harvesting Machine Company
Answer: D
Q2) In the franchise industry,the person or business providing the rights to an individual for the local distribution and/or sales of a specified product or service is called the:
A)franchisee
B)district developer
C)franchisor
D)city council
Answer: C
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Chapter 2: Recognizing Franchising Opportunities
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10 Verified Questions
10 Flashcards
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Sample Questions
Q1) Which one of the following is NOT an advantage of franchising for the franchisee?
A)established product or service
B)technical and managerial assistance
C)quality control standards
D)expansion
Answer: D
Q2) Reasons a franchise system would have corporate locations,as well as franchisee locations are shown below,except for:
A)investors believe corporate ownership demonstrates that the franchise concept works.
B)franchisor avoids potential conflict with franchisees that may rise based upon market and site locations.
C)by having some corporate locations,the franchisor could take over,if a troubled or failing franchisee's location,if necessary.
D)by having corporate location,the franchisor remains close to the ultimate customer.
Answer: B
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Chapter 3: The Franchisor Business Plan
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10 Verified Questions
10 Flashcards
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Sample Questions
Q1) How many phases are included in the Franchise PERT Chart?
A)3
B)4
C)6
D)8 Answer: C
Q2) What are the four main areas of taxation one must consider when reporting about a franchise's activity?
A)sales taxes,business taxes,property taxes,employee taxes
B)sales taxes,property taxes,employee taxes,franchisor taxes
C)sales taxes,property taxes,employee taxes,franchisee taxes
D)sales taxes,property taxes,franchisor taxes,franchisee taxes
Answer: A
Q3) Which of the following is NOT a component of a properly developed franchisor plan?
A)franchisor's business plan
B)franchisee recruitment package
C)franchise feasibility study
D)franchisee operations manual and success package
Answer: C
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Chapter 4: Franchisor Management, Organization and Administrative Policy
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10 Verified Questions
10 Flashcards
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Sample Questions
Q1) There are four types of growth opportunities for franchise systems to increase sales and share-of-market within their customer base.Which one below is not one of these tried-and-true approaches for growth?
A)Retain existing customers.
B)Stimulate more purchase within your existing customer base.
C)Offer new products/services in new territories to new customers
D)Cross-sell complementary products/services that meet new or a different combination of existing customer needs.
Q2) To be a successful leader,Jim Peterson,franchisor and former President of the IFA,believes it is necessary for four factors to exist for a person to be a successful leader.Which one of the following is not one of the required factors for successful leadership?
A)A sense of a strategic vision
B)Ability to articulate the vision,
C)Ability to develop agenda to accomplish a strategic vision
D)Ability to achieve a good golf score while making sales to prospective franchisees
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Chapter 5: The Franchise Marketing Process
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11 Verified Questions
11 Flashcards
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Sample Questions
Q1) Which one of the following is Not one of the "Four P's" in marketing?
A)product
B)process
C)price
D)promotion
Q2) Why would a franchise system monitor its external environment?
A)to identify factors which may pose major threats to or provide significant opportunities for the franchise system.
B)to develop a set of objectives to fit the mission and overall goals of the franchise system.
C)to concentrate resources outside of the firm more than inside of the firm.
D)to second-guess what its suppliers intend to do next.
Q3) usually provides the starting-point of data collection when conducting marketing research.This category of information offers the distinct advantages low cost and quick availability.
A)internal market information
B)external market information
C)secondary data
D)none of the above
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Page 7
Chapter 6: Selling Franchises and Marketing Research
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10 Verified Questions
10 Flashcards
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Sample Questions
Q1) What's the difference between the sales package and sales playbook?
A)the sales playbook consists of three parts,and the sales package consists of five parts.
B)the sales brochure and ufoc are part of the sales playbook but not the sales package.
C)the mission statement and opening benefits are part of the sales package but not the sales playbook.
D)the sales package is used by the franchisor to give a prospective franchisee a good sales presentation;the sales playbook helps the salesperson sell to customers.
Q2) What helps you identify the customers whose needs your franchise best satisfies?
A)target marketing
B)marketing research
C)inquiries
D)a professional approach to sales
Q3) How might you describe the professional approach to sales?
A)talks 70%,listens 30%
B)pushy
C)customer oriented
D)faster
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8
Chapter 7: Co-Branding
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5 Verified Questions
5 Flashcards
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Sample Questions
Q1) What factor generally determines which co-branding method is chosen by a franchisor?
A)expertise
B)personal preference
C)profit potential
D)none of these is a determining factor.
Q2) Approximately what percentage of food franchises are co-branded units?
A)5 %
B)20%
C)50%
D)75%
Q3) Which of the following is true about co-branding?
A)it is primarily franchisor-driven.
B)it is primarily customer-driven.
C)it is primarily franchisee-driven.
D)it can be either franchisor- or franchisee-driven.
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Chapter 8: Managing the Franchisors Operations Process
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10 Verified Questions
10 Flashcards
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Sample Questions
Q1) Which franchisor manual provided by the franchisor to new franchisees is referred to as "the bible?"
A)training manual
B)site inspection manual
C)quality control manual
D)operating manual
Q2) The primary administrative costs of administering a franchise program typically include those of:
A)clarifying and disseminating costs of operation about the prototype unit
B)hiring and training salespeople to recruit or solicit prospective franchisees
C)running background checks on the director of franchising and the initial salespeople hired to sell franchises
D)developing an estimate of the number of franchisees to be recruited and signed in the first year of franchising
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10
Chapter 9: Location and Site Selection
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10 Verified Questions
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Sample Questions
Q1) Four factors are important in determining the size and shape of a primary service area (PSA).These include all of the following EXCEPT:
A)BPI
B)alternative shopping choices
C)intuition
D)drive-time analysis
Q2) Two primary points must be considered when a franchisor develops expansion plans for a franchise.What are they?
A)distribution and number of existing franchises
B)overhead and distribution
C)overhead and franchisor's previous experience with expansion
D)number of existing franchises and franchisor's previous experience with expansion
Q3) Which two concepts receive primary consideration when determining store layout?
A)customer traffic and employee traffic
B)attractive décor and effective lighting
C)customer traffic and attractive décor
D)effective lighting and overall attractive atmosphere
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11
Chapter 10: Accounting and Financial Statements:
Presentation and Uses
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Sample Questions
Q1) Which of the following processes involves interpreting a relationship between two financial figures?
A)accounting
B)ratio analysis
C)ledgering
D)cash flow
Q2) How often should financial accounting information be reviewed by management?
A)monthly
B)every fiscal quarter
C)every six months
D)annually
Q3) A franchise's economic figures must be recorded,then transferred and balanced before final calculations can be determined.Which of the following sequences indicates the path taken by these figures during the accounting process?
A)journal,general ledger,financial statements
B)general ledger,journal,financial statements
C)financial statements,journal,general ledger
D)journal,financial statements,general ledger
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Chapter 11: Financial Management and Fiscal Planning
Tools and Techniques
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Sample Questions
Q1) Short-term obligations created by the franchisee in buying supplies,materials or services associated with running the business are referred to as:
A)inventory management
B)accounts receivable
C)accounts payable
D)working capital
Q2) Which one of the following is Not a common method of borrowing funds in the short-term when considering the rate of interest to be paid:
A)percentage-of-sales method
B)simple
C)add-on
D)discount
Q3) All of the current assets of the firm,or more specifically,current assets minus current liabilities equals:
A)cash discounts
B)marketable securities
C)inventory management
D)working capital
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Chapter 12: Information Systems in Franchising
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10 Verified Questions
10 Flashcards
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Sample Questions
Q1) The information contained in the daily business intelligence reports becomes the foundation upon which a franchise system builds what?
A)experience
B)working knowledge profiles
C)reliability
D)target markets
Q2) Why might it be a good idea for a franchisor to investigate several ASP vendors before choosing one?
A)some ASP vendors are riskier than others.
B)the franchisor is looking for the ASP with the highest value and the lowest cost.
C)the franchisor must be sure the data of the franchise is well-protected.
D)all of the above.
Q3) Which of the following activities at the franchisor's headquarters office should be the center of attention?
A)marketing and advertising to prospective franchisees for franchise development
B)managing people who perform franchise support and franchise development
C)helping and supporting business units
D)dealing with financial issues such as accounting and finances
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14
Chapter 13: Franchise Legal Documents
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5 Verified Questions
5 Flashcards
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Sample Questions
Q1) Why do most franchisors use the UFOC format for disclosure?
A)not all states accept the FTC rule format.
B)the UFOC covers more ground than the FTC rule format.
C)the FTC rule format covers more ground and is more complicated to use.
D)the UFOC is accepted in more registration states than the FTC rule format.
Q2) What sort of disclosure document is required by the FTC Rule?
A)the format prescribed by the FTC
B)the UFOC,or uniform franchise offering circular
C)both of the above formats
D)one of the above formats
Q3) Which of the following allows a developer to build a num?ber of franchised businesses in a particular market area?
A)Franchise Agreement
B)Sub-Franchising Contract
C)Area Development Agreement
D)UFOC
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15
Chapter
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Sample Questions
Q1) When does a trade secret become enforceable?
A)when it is developed
B)when it is filed with a federal agency
C)when a Confidentiality Agreement is signed
D)when it is shared with a certain percentage of the firm's employees
Q2) Which of the following is a word,name,phrase,symbol,or design that is used by a manufacturer or merchant to identify and distinguish its goods from those sold by others?
A)copyright
B)trademark
C)service mark
D)patent
Q3) Which of the following does the trademark most often represent?
A)the source of a product
B)the name of a product
C)a standard of quality
D)a protectable property right
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Page 16
Chapter 15: Investigating Franchise Opportunities
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10 Verified Questions
10 Flashcards
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Sample Questions
Q1) Almost all franchising agreements are set up for a specified term,generally from
A)five to twenty years
B)one to six years
C)twenty to forty years
D)ten to thirty years
Q2) About ( )percent of franchise systems provide some form of earnings claims for franchisees?
A)5 percent
B)about 25 percent
C)about 40 percent
D)about 70 percent
Q3) For a new franchisee joining a solid franchise system
A)much of the guesswork of running a business is removed.
B)most of the mistakes made by an independent entrepreneur will be experienced
C)the new franchisee is yet to learn and resolve all the "kinks" of running a business
D)all of the above are true
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Chapter 16: Financing Your Franchised Business
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Sample Questions
Q1) Typically,franchise fees
A)remain the same and do not vary,depending on the number of franchised units planned for in the initial agreement between franchisor and franchisee
B)may differ within the same franchise system,depending on the number of franchised units to be opened
C)are set very high to discourage most and only attract the most financially capable D)most often the greatest financial commitment required of a potential franchisee
Q2) The franchisee's major financial obligation is to:
A)the Internal Revenue Service
B)one's State Department of Revenue
C)City or County health department
D)the franchisor
Q3) The "initial franchise fee" is
A)a one-time cost or fee born by the new franchisee
B)a recurring cost or fee,every three or five years
C)a one-time fee that is most often waived by the franchisor
D)none of the above
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18
Chapter 17: Marketing the Franchisee Business
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8 Verified Questions
8 Flashcards
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Sample Questions
Q1) Potential customers can be grouped into market segments in different ways as based upon any one-up-to-four---of the following factors.Which one factor below is not a means to development market segmentation?
A)demographic factors
B)behavioral factors
C)writing style factors
D)psychographic factors
E)geographic factors
Q2) Marketing research in franchising is done primarily by
A)the franchisor
B)the independent franchisees
C)both franchisor and franchisee collaboratively
D)contracted outside survey research firms.
Q3) In making an advertising decision,a franchisor or franchisee should have the primary objectives of advertising address each of the following issues,except:
A)to inform potential purchasers
B)to discourage competitors
C)to persuade potential customers to buy from your firm
D)to remind customers of your product/service availability
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Page 19
Chapter 18: Managing the Franchisee Business Stage Six:
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Flashcards
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Sample Questions
Q1) Horizontal territorial restrictions
A)are legal and appropriate agreements for franchisees
B)enhance competition among firms
C)involves competitors selling similar products grouping together and excluding a third part
D)involves a relationship between the franchisor and franchisee
Q2) Which of the following is one of the four principles of coordination that promote effective work groups?
A)coordination is best accomplished through electronic means such as e-mail,electronic calendars,etc.
B)coordination must address all factors within any phase of any endeavor
C)coordination should occur at most once a week
D)coordination is only necessary in the beginning and at the end of a project
Q3) As stated in the text,all of these items are among the ten most common legal problems of franchisees except:
A)sharing advertising costs
B)minimum performance requirements
C)fees for support services
D)correct information being provided to the IRS
Page 20
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Chapter 19: The Franchising Relationship
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Sample Questions
Q1) What can a franchisor do to enhance awareness in the franchisor-franchisee relationship?
A)encourage the formation of local or regional clubs for franchisees
B)offer awards or performance incentives to successful franchisees
C)take periodic surveys to monitor franchisees' feelings and concerns
D)all of the above
Q2) What is the key to the Maturity stage in the franchisor-franchisee relationship?
A)Expansion
B)Profitability
C)Communication
D)Balance of power
Q3) The franchisor-franchisee relationship usually goes through the following cycle:
A)growth,maturity,decline/development
B)introduction,growth,maturity,decline/development
C)introduction,growth,decline/development,maturity
D)growth,decline/development,maturity
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21
Chapter 20: Franchiser Support Services Stage Seven: Current Issues in Franchising
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Sample Questions
Q1) Which of the following is the most compelling reason for someone to seek a franchise opportunity?
A)the chance to be self-employed
B)profitability
C)the opportunity to enjoy growth in the franchise
D)pressure from the franchisor
Q2) What is the greatest support for a franchisee?
A)a good training manual
B)lots of start-up capital
C)the opportunity for success
D)frequent contact with field representatives
Q3) What is required of the person in charge of a franchisee training program?
A)experience as a franchisor
B)understanding of the needs of the particular franchised business
C)knowledge about the training process
D)both b and c
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22
Chapter 21: Social Responsibility and Business Ethics
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Sample Questions
Q1) Which of the following illustrates the highest level of social responsibility?
A)safe working conditions for employees
B)support for social and cultural activities
C)fair pricing of their products and services
D)providing employees opportunity for growth and development of skills
Q2) Business ethics
A)only involves moral values
B)only involves establishing behavioral standards
C)ultimately is about decision-making
D)only involves determination of right and wrong
Q3) Which of the following illustrates the highest level of social responsibility?
A)safe working conditions for employees
B)support of social and cultural activities
C)fair pricing of products/services
D)providing employees opportunities for growth and development of skills
Q4) Business social responsibility
A)obligations are easily defined
B)is a matter of complying local,state and federal laws and regulations
C)is supported by a broad public mandate
D)consists of the obligations a business has to society
23
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Chapter 22: International Franchising
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Sample Questions
Q1) Probably the main hindrance with expanding into foreign markets is:
A)high costs
B)government red tape
C)labor supply
D)lack of master franchisees
Q2) When developing franchise systems in a developing foreign country the first kind of franchises to develop in that country are:
A)domestic franchises
B)foreign retail franchises
C)domestic hospitality franchises
D)foreign hospitality franchises
Q3) The largest U.S.franchise restaurant system in China is
A)McDonald's
B)KFC
C)Wendy's
D)Burger King
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