Republic of the Philippines

Western Philippines University

A STRONG PARTNER FOR SUSTAINABLE DEVELOPMENT

ACADEMIC AFFAIRS

Name: Johnson S. Apungan Program/Year/Section:BSBA/3/B

Score:____________

_Midterm_ Examination

____PMME 104 - Franchising____

(Course No. & Course Title)

Directions. Multiple Choice: Choose the letter of the correct answer. Write your answer on the
space provided.

B 1. This type of franchise is generally low investment that can be operated alone or with minimal
standing.
a. product franchise
b. job franchise
c. business format franchise
d. investment franchise

A 2. This fee is paid at given intervals of time, such as weekly, monthly, or annually. Sometimes it’s
a flat fee, other times it’s a percentage of sales.
a. royalty fee
b. franchise fee
c. in-house financing
d. third-party financing

B 3. It is where the business model of franchising started to appear. Some of the local governments
granted high church officials a license to maintain order and assess taxes.
a. the 1960’s
b. the middle ages
c. the colonial period
d. the turn of the century

B 4. This type of franchise is a hybrid wherein a franchise enters into a relationship with an
existing company and converts it into a franchise unit.
a. Job franchise
b. Conversion franchise
c. Investment franchise
d. Business format franchise

A 5. This is the most popular of all types of franchising, it operates under the parent company’s
brand.
a. business format franchise
b. investment franchise
c. conversion franchise
d. job franchise

D 6. This type of franchise is large scale business that requires a huge capital investment.
a. conversion franchise
b. business format franchise
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 Republic of the Philippines
Western Philippines University
A STRONG PARTNER FOR SUSTAINABLE DEVELOPMENT

ACADEMIC AFFAIRS
c. job franchise
d. Investment franchise

A 7. It is the person who buys the rights to operate the franchise from the franchisor.
a. franchisee
b. franchise
c. franchisor
d. franchise agreement

D 8. It makes the country an appealing option as a franchise hub.

a. market location
b. demographic location
c. geographic location
d. Strategic location

A 9. He played a part in the actual design of the franchise model. Once he was able to get mass
production down to a science, he knew that he had to hone in on the distribution side of the
business.
a. Henry Ford
b. Ray Croc
c. Isaac Singer
d. William Metzger

A 10. The length of time the franchise agreement is good for.

a. term of agreement
b. franchise agreement
c. franchise disclosure document
d. royalty fee

C 11. A license that gives the person buying the ability to use trademarks, fees, and support from an
established business.
a. franchisee
b. franchisor
c. franchise
d. franchise agreement

D 12. Which of the following does not include under crucial requirements mandated by the
government when starting a business?
a. Mayors permit
b. BIR Registration
c. Special or other documents
d. Term of agreement

C 13. It is an established business and a parent company that allows a person to start operating
under their name for a fee.
a. franchise
b. franchisee
c. franchisor
d. franchise agreement

D 14. It can be asked from the business operator according to the kind and nature of the business
that they want to operate
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 Republic of the Philippines
Western Philippines University
A STRONG PARTNER FOR SUSTAINABLE DEVELOPMENT

ACADEMIC AFFAIRS
a. mayor’s permit
b. business registration
c. Registration from the Bureau of Internal Revenue (BIR)
d. Special or other requirements

A 15. It involves what we call “Franchise Kings”. The local sovereign/lord will authorize
individuals to hold markets, run local ferries, hold fairs, or to even hunt on his land.
a. the colonial period
b. the middles age
c. the turn of the century
d. the 1840’s

B 16. Which of the following tips makes international expansion successful?

a. have a good product
b. do not commit to your expansion project
c. don’t get a good lawyer
d. do not acknowledge your mistakes

B 17. Entrepreneurs must have a _______, which can be obtained from the Revenue District
Office (RDO) within the registered location of the business.
a. SSS (Social Security System)
b. TIN (Tax Identification Number)
c. PhilHealth
d. PAG-IBIG

C 18. Whose contributions to franchising have to do with uniformity and cleanliness. 

a. Henry Ford
b. William Metzger
c. Ray Croc
d. Isaac Singer

D 19. The first person to patent a practical, widely-used sewing machine

a. William Metzger
b. Ray Croc
c. Henry ford
d. Isaac Singer

C 20. It is sometimes called a distribution franchise; the franchisee distributes the parent company
products and some related services.
a. job franchise
b. investment franchise
c. product franchise
d. conversion franchisee`

B 21. Sometimes franchisees opt to get financing elsewhere, such as from a bank or specialty
financing source. Any organization outside of the franchisor that offers fees is called?
a. job franchise
b. Third Party Financing
c. In-house financing
d. Royalty fee

C 22. Franchise fees can be daunting in the beginning, so many franchisors offer ______ options
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 Republic of the Philippines
Western Philippines University
A STRONG PARTNER FOR SUSTAINABLE DEVELOPMENT

ACADEMIC AFFAIRS
for their potential franchisees.
a. job franchise
b. Third Party Financing
c. In-House financing
d. Royalty fee

D 23. The Philippine market offers an innately large consumer base that is attractive for franchise
operators except:
a. Cultural Affinity
b. large pool of skilled labor
c. management talent
d. Royalty fee

D 24. Which of the following is not an example of Job Franchise?

a. cellphone repairs and accessories
b. cleaning services
c. travel agency
d. Vending machines

A 25. “The two most important requirements for major success are: first, being in the right place
at the right time, and second, doing something about it.” Whose famous line is this?
a. Ray Kroc
b. Isaac Singer
c. Henry Ford
d. H.O. Kholler

Directions. TRUE or FALSE: Write TRUE if the statement is correct and FALSE if not. Write
your answer on the space provided.

FALSE INFORMATION 1. Marketing Strategy generated and maintained systematically offers the
franchisor an upper hand in managing the franchise better.

TRUE 2. A franchisee should have a long-term growth orientation rather than a short-term profit
orientation. This helps in maintaining a long-term relation with the franchisor.

FALSE CONFLICT MANAGEMENT 3. Competitors’ Analysis Anticipate probable source of

conflicts between the franchisor and the franchisees and devise strategies to resolve them.

TRUE 4. Franchise system should allow franchisors to tailor all their marketing efforts to meet not
only the legal requirement of the local market, but also the cultural and behavioral aspects of the
local market.

TRUE 5. Franchisees may incur more costs due to royalties, training, or build-out requirements,
may experience higher revenue due to name recognition, and enjoy larger margins due to
purchasing power.

FALSE PROFITABILITY 6. Flexibility is the primary goal of all business ventures, without it the
business will not survive in the long run.

FALSE MULTI-UNIT EXPANSION 7. Regulation requires skilled, trained, and motivated

individuals to manage and operate new locations.
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 Republic of the Philippines
Western Philippines University
A STRONG PARTNER FOR SUSTAINABLE DEVELOPMENT

ACADEMIC AFFAIRS

TRUE 8. Once you franchise your business the next step is to sell franchises to qualified
franchisees that have capital.

TRUE 9. When you franchise you are giving up some control to your franchisees who will own and
operate their franchised locations.

TRUE_ 10. Wholesaler purchases products from the producer and manages the distribution to
retailers.

TRUE 11. Franchises offer stability for owners and consistency for consumers.

TRUE 12. Vertical System Is one which the main members of a distribution channel - produces,
wholesaler, and retailer – work together as a unified group in order to meet consumer goods.

TRUE 13. One of the many disadvantages of purchasing a franchise is the easily recognizable
name, logo, and products or services.

TRUE 14. The most important advantage of franchising is that allows you to achieve the multi-unit
expansion of your business.

TRUE 15. A franchisee should be self-disciplined with regard to time management and should be
able to allocate time for paperwork, meetings, and moving in the market.

Directions. ESSAY (10 Points)

1. In your own perception, what do you think is the importance of investigating the franchise
as part of a decision making before entering a business?

From my point of view, what do I think is the importance of investigating the franchise before
entering a business, it seems to me that, investing of a large amount of money is risky when your
going to fails, the importance of investing before to engage to the business helps me to avoid risky
decision, besides of that it helps me to know what is the best decision, because I do believe that
only one mistake it brings me loses. Investigating before entering to the business helps me to
predict what will happen to the business.

Prepared by:
______________
Ziedwrick A. Dicar
Faculty

Gellie S. Mangaccat
Faculty

WPU-QSF-ACAD-14A Rev. 00 (10.02.19)