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SBM - Chapter 4
SBM Chapter 4 vocab
| Question | Answer |
|---|---|
| Franchise | The right to sell the licensing company’s goods or services in a particular area |
| Franchising | A process for expanding a business and distributing goods and services through a licensing relationship |
| Franchisor | The party in a franchise contract that specifies the methods to be followed and the terms to be met by the other party. |
| Franchisee | The party in a franchise contract that is granted a license to do business under a particular trademark and trade name by the franchisor. |
| Product and trade name franchising | A franchise agreement granting the right to use a widely recognized product or trademark |
| Business format franchising | A franchise arrangement whereby the franchisee obtains an entire marketing, management, and supply system geared to entrepreneurs |
| Franchise contract | The legal agreement between franchisor and franchisee. The contract spells out your relationship and obligations to each other |
| Master licensee | An independent firm or individual acting as a middleman or sales agent with the responsibility of finding new franchisees within a specified territory |
| Multiple-unit ownership | Ownership by a single franchisee of more than one unit of the franchised company |
| Area developers | Individuals or firms that obtain the legal right to open several franchised outlets in a given area |
| Piggyback franchising | The operation of a retail franchised outlet within the physical facilities of a host store |
| Multibrand franchising | The operation of several franchised businesses within a single corporate structure |
| Co-branding | Bringing two or more franchise brands together within a single enterprise |
| Churning | Actions by franchisors to void the contracts of franchisees in order to sell the franchise to someone else and collect an additional fee |
| Encroachment | To sell another franchise location within the market area of an existing franchisee |
| Franchise Rule | A rule that requires the franchisor to disclose certain information to prospective franchisees |
| Franchise Disclosure Document | A detailed statement providing information about the franchisor that satisfies the franchise disclosure requirements of the F T C. |
| Business brokers | Specialized brokers that bring together buyers and sellers of businesses |
| Due Diligence | The exercise of reasonable care in the evaluation of a business opportunity |
| Nondisclosure agreement | An agreement in which the buyer promises the seller that he or she will not reveal confidential information or violate the seller’s trust. |
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