Which of the following benefits do franchises enjoy over other small business owners? Select the two correct answers.
A. Franchises have more control over the goods and services that they provide.
B. Franchises have a lower 5-year failure rate than other small businesses.
C. Franchises have lower start-up costs than other small businesses.
D. Franchises benefit from the successful marketing provided by franchisors.
E. Franchises are less expensive to operate than other small businesses.
B. Franchises have a lower 5-year failure rate than other small businesses.
D. Franchises benefit from the successful marketing provided by franchisors.
Explanation:
A. This is generally not correct. Franchises typically have less control over the goods and services they provide, as they are usually required to adhere to the standards and offerings laid out by the franchisor.
C. This is often not the case. Franchise start-up costs can sometimes be higher than other small businesses due to franchise fees, and the costs associated with adhering to franchise standards.
E. This is not necessarily true. Franchises are not inherently less expensive to operate—operational costs can vary widely depending on the type of franchise, location, and the terms of the franchise agreement.