PRE-FINAL

FRANCHISING

Name: ___________________________ Date: __________

Yr./Sc./Cr.: ________________________ Score: _________

TRUE OR FALSE: Write ABCD if the statement is correct and write DCBA if the
statement is incorrect. No Erasure (correction tape, double writing, etc) 1 point each

1. Local Marketing Manual provides descriptions of what is and is not acceptable

with respect to logo use, tagline use, etc. F
2. Item five in FDD is royalty fee. F
3. Brick-and-mortar businesses require a minimum of three manuals in franchising.
F
4. The Federal Trace Commission and state laws govern franchising. F
5. The franchise agreement is the binding contract between you and your
franchisee. T
6. By law, you can’t sell a franchise until you’ve given the prospective franchisee an
FDD. T
7. The formula for stockholders’ equity is liabilities minus assets. F
8. In FDD initial and franchise fee document are included. F
9. Architectural Guide is created by an engineering firm and provided to franchisees
for their architect to adapt for their site. F
10. The FDD discloses extensive information about you and your business, divided
into a cover page, table of contents, and 22 categories. F
11. The purpose of the FDD is to deliver three items to the franchisee transparency,
education and solidification. F
12. Item three in FDD is litigation. T
13. A Start-Up Manual from the moment they sign their franchise agreement, to the
time they open their doors for business. T
14. Item three in FDD is bankruptcy. F
15. A franchise operations manual is the DNA of a franchise system – the foundation
that governs franchise unit performance, procedures and conduct. T
16. Food Safety Manual it contains comprehensive details about the recipe and may
also include how to assemble/present the dish. F
17. The title of the chapter seven is franchise agreements and documents.
18. Franchise operations manual are not important resource for franchisees because
they act as the everyday reference tool of the franchisee. F
19. Franchise operations manuals aren’t essential to franchisors because they ensure
uniformity of customer service and quality management across locations, act as a
training tool for new franchisees, and serve as demonstrable proof. F
20. Item eight in FDD is restriction on sources of products and services. T
ENUMARATION: Write all included in the following requirements below. No Erasure
(correction tape, double writing, etc.)
1. Item one to item twelve that included in FDD. (In order)
2. Things want to see on franchisor’s balance sheet. (In any order)
3. Three categories in balance sheet. (In any order)
 PRE-FINAL
FRANCHISING

Name: ___________________________ Date: __________

Yr./Sc./Cr.: ________________________ Score: _________

TRUE OR FALSE: Write ABCD if the statement is correct and write DCBA if the
statement is incorrect. No Erasure (correction tape, double writing, etc) 1 point each

1. Item two in FDD is business experience. T

2. One of the guides that included in operation manual is daily and nightly operating
procedure. F
3. One of the guides that included in operation manual is management documents.
T
4. Item twenty-two is receipt. F
5. One of the guides that included in operation manual is personnel. T
6. Prep, Recipe, and Build Manuals this entails food safety and hygiene for the
administration of food and beverages and for workers. F
7. Technical Manual contains instructions related to the design or assembly of a
product or the implementation of a service, such as painting, fertilizing the lawn,
tiling, etc. T
8. The formula for assets is liabilities plus equity. T
9. Two primary documents should create in franchising is Franchise Agreement and
Franchise Disclosure Data (FDD). F
10. The operations Manual is at the core of the retail system and is vital to its
success. F
11. Item seven in FDD is estimated Initial Investor. F
12. The title of the chapter eight is franchise operating guide.
13. There are 17 states requiring franchisors to register or inform their FDDs with the
state that they will sell franchises before any franchising activity in the state
begins to be carried out. F
14. Brand Guide is containing a sample of local marketing techniques and explains
how to use them. F
15. Item twenty-two is receipt. F
16. Employee training manual is created to help franchisees to train their employees
efficiently, most franchisors often produce content that can be adapted by
franchisees for new training for employees. T
17. FDD must be prepared in strict compliance with FTC rules. T
18. One of the guides that included in operation manual is sales output. F
19. Item one in FDD is the franchisor, its parents, predecessors, and affixion. F
20. Operations Manual covers the responsibilities of franchisees in the areas of
brand standards and any essential processes that may relate to meeting them. T
ENUMARATION: Write all included in the following requirements below. No Erasure
(correction tape, double writing, etc.) 1 point each.

1. Item thirteen to item twenty-two included in FDD. (In order)

2. Things you want to see on a franchisor’s income statement (in any order)
3. Give two other names of income statement.