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Exam 5: Small Business, Entrepreneurship, and Franchises

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Question 41

Multiple Choice

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The industry concerned with the movement of goods from producer to consumer is

A) service.
B) distribution.
C) production.
D) agriculture.
E) wholesaling.

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Question 42

Multiple Choice

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To qualify as a small business, a manufacturing plant can employ no more than ____ people.

A) 500
B) 1,000
C) 2,000
D) 3,000
E) 3,500

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Question 43

Multiple Choice

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Marielena Lopez owns a Wendy's franchise.Marielena feels that the franchisor is hurting his business by forcing him to use certain high-priced suppliers.The franchisor says that this power is implied in the franchise agreement.Who is likely to arbitrate this dispute?

Service industries make up about 48 percent of all small businesses.

A franchisor supplies all of the following except

Of the small businesses in the distribution industry, nearly three-quarters of them are involved in

Franchising is a win-win combination; both franchisees and franchisors are guaranteed success.

The average length of an SBA loan is about twenty-five years.

Dana owns and operates a catering business.This is an example of a

About one-third of franchised businesses fail during the first two years of operation.

Entrepreneurial spirit is the desire to create a new business.

There are three general types of franchising arrangements.In one approach, the franchisor authorises retailers to sell a particular brand-name item.This type of arrangement is common in all of the following areas except

Many small firms seek to establish a particular niche in the market, realising that they cannot afford to operate on a larger scale without exposing themselves to considerable risk of retaliation from larger companies.When a number of small businesses are operating in this manner, they are forcing the larger businesses to recognise and account for their influence on the market.In this way, small businesses are primarily

Personal Wellness Angela has been working for a local small business called Personal Wellness for the last three years.It is a retail business that sells sporting goods equipment.When she started her job, she noticed several things as causes of the business not doing as well as the owners were expecting.Angela has been thinking of starting her own small business because she feels she has learned a great deal through working for Personal Wellness. Due to her education, attention to detail, and organisation skills, Angela's manager asked her to create a business plan for Personal Wellness.The manager hoped that this plan would help organise, structure, and focus the business.As part of the plan, Angela suggested that Personal Wellness contact a group of senior and graduate students to provide management counselling for the company as she is concerned that her leaving the company may be detrimental to the slow, but forward, progress that the company is making and her connection with the owners is strong.Angela's most immediate concern is keeping the business from failing. -Refer to Personal Wellness.What is the least likely reason that Personal Wellness would possibly fail?

What do franchisees typically have to pay to the franchisor?

SCORE is a group of retired businesspeople who volunteer their services to small businesses through the SBA.

In the past, the SBA could guarantee loans up to $5 million.

All of the following are reasons people go into business except the

What is the main advantage of small business that helps retain effective employees who could earn more at a larger firm?

Some advantages of the sole trader also apply to the small business.