Question

5 multiple choice 4 points what is the primary advantage of franchising for a franchisor? ability to expand without a major investment. increased control over operations. reduced risk for the franchisee. guaranteed profitability.

Explanation:

To determine the primary advantage of franchising for a franchisor, we analyze each option:

• "Ability to expand without a major investment": Franchisors receive fees/royalties from franchisees, who fund the expansion (e.g., opening new locations). This is a key advantage as the franchisor doesn't bear the full cost of expansion.
• "Increased control over operations": Franchising typically involves the franchisee operating with some autonomy, so control actually decreases, not increases. Eliminate this.
• "Reduced risk for the franchisee": The question is about the franchisor's advantage, not the franchisee's. Eliminate this.
• "Guaranteed profitability": No business model guarantees profitability, so this is incorrect.

Answer:

A. Ability to expand without a major investment.