There are several disadvantages of franchising as an entry mode. Which of the following is one of them?
A There is little incentive for the franchisee to build a profitable operation as quickly as possible.
B The firm incurs many of the costs and risks of opening a foreign market on its own.
C Franchising may inhibit the firm's ability to use the profits obtained to open additional businesses in the same country.
D Franchising may inhibit the firm's ability to take profits out of one country to support competitive attacks in another.

Question

09-01-2021
Business

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There are several disadvantages of franchising as an entry mode. Which of the following is one of them?
A There is little incentive for the franchisee to build a profitable operation as quickly as possible.
B The firm incurs many of the costs and risks of opening a foreign market on its own.
C Franchising may inhibit the firm's ability to use the profits obtained to open additional businesses in the same country.
D Franchising may inhibit the firm's ability to take profits out of one country to support competitive attacks in another.

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topeadeniran2 topeadeniran2 · Answer 1 · 2021-01-14T09:42:24+01:00

Answer: D. Franchising may inhibit the firm's ability to take profits out of one country to support competitive attacks in another.

Explanation:

Franchising is defined as a form of marketing whereby the franchisor allows another individual or firm use its brand name s d business system.

From the options given, the disadvantage of franchising is that itbmay inhibit the ability of the firm to take profits out of one country to support competitive attacks in another.