Question

Qiang is ready to become a franchise owner and open one of the 50 Southwest Diners, a very successful fast food chain specializing in dishes from the American Southwest. Which of the following problems is Qiang most likely to encounter if she agrees to become a franchisee?
A. High initial costs and fees.B. Lack of financing.C. Poor name recognition and visibility.D. Lack of managerial assistance.

Answer 1

Answer:

A

Explanation:

When we talk about franchising then it comes with high cost and fee. Firstly, the franchisee need to fulfill certain requirements like specified space, Dining capacity etc. Then franchisee needs pay franchise fee. So to fulfil the specific requirements to attain the franchise, the cost is high. Franchisor, to maintain the brand name apply certain specific requirements on number of diners, space, type of dishes etc. They all comes with high cost. Also the franchise fee will be high as written in question that its successful fast food chain.

After business starts, the franchisee needs to pay certain amount to franchisor every month in terms of ROYALITY.

So, WHen we talk about franchise it comes with high cost.