Since Donna was laid off from her job a few months ago, she has enjoyed having more time to relax, exercise, and be with her family. Now she is wondering whether she should start her own business

Question

Donna should consider purchasing a franchise ONLY if she ________.A) does not have enough capital to start an independent business
B) is prepared to handle the heavy workload that comes with a franchise
C) wants the protection from competition that the franchisor would guarantee
D) is interested in the products sold by a particular franchise
E) requires complete creative control

Answer 1

B
Explanation: B) Franchisees spend a lot of time managing a business, as all new business owners must; therefore, a franchisee must be prepared for a heavy workload. If Donna does not have enough funds to start an independent business, she may have even more difficulty funding a franchise, since franchises often cost more to start up than comparable independent businesses. Donna also should not expect that a franchisor would protect her territory from competition by other franchisees. Donna may consider a franchise of a product in which she is interested, but should realize that her personal interest in the product may have little to do with her satisfaction or success in running a business offering that product. In a franchise, there is not much opportunity to contribute creatively to the franchise because the franchisor often controls the look of the store and the product or the service.