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) Poor name recognition and visibility
C) Lack of financing
D) Lack of managerial assistance

Question

Quizplus · Accepted Answer

While franchisors often provide franchisees with financial and managerial assistance, they typically demand a fee just to obtain the rights to the franchise. The fees charged by successful franchisors can be quite high. In addition, most franchisors also require franchisees to pay a fee, called a royalty, based on profits or sales.

Qiang Is Ready to Become a Franchise Owner and Open