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05 Mar 2022, 08:00
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Question 1
C
Be sure to select an answer first to save it in the Error Log before revealing the correct answer (OA)!
Difficulty:
25%
(medium)
Question Stats:
67% (02:23) correct
33%
(02:20) wrong
based on 309
sessions
History
Date
Time
Result
Not Attempted Yet
Question 2
C
Be sure to select an answer first to save it in the Error Log before revealing the correct answer (OA)!
Difficulty:
35%
(medium)
Question Stats:
63% (01:00) correct 37%
(00:55) wrong
based on 292
sessions
History
Date
Time
Result
Not Attempted Yet
Question 3
B
Be sure to select an answer first to save it in the Error Log before revealing the correct answer (OA)!
Difficulty:
65%
(hard)
Question Stats:
50% (01:28) correct 50%
(01:31) wrong
based on 294
sessions
History
Date
Time
Result
Not Attempted Yet
Entrepreneurship and franchising differ as business models in several important aspects, one of which is the concept of ownership as it relates to control. Businesspeople who dream of being their own boss may consider franchise opportunities without understanding the nature of this business model. A franchise owner is not an independent businessperson in the same sense as an entrepreneur. Rather, a franchise owner has purchased assets of an existing company under certain conditions. The owner undergoes extensive training to learn the company's product line, style of service, and procedures so the company's carefully crafted identity is maintained. The rules are stringent, and the relationship between company and franchise owner is strictly governed by contracts. The franchise owner is, in a real sense, not the boss.
But franchising affords significant advantages to the businessperson, who, at great expense, buys a tested business model with immediate name recognition and established, successful procedures. Franchise owners often receive long-term mentoring and other support services from the franchisor, whose interest in assuring success for the new location is strong. Franchise owners have prearranged access to supplies and to the discounts available in economies of scale. The reduction of the risk of failure, perilously high for start-ups, is slashed in the franchise model when the company is well known regionally or better yet nationally. A businessperson deciding whether to franchise or to start up a business must weigh these advantages against the attraction of being one's own boss.
But franchising affords significant advantages to the businessperson, who, at great expense, buys a tested business model with immediate name recognition and established, successful procedures. Franchise owners often receive long-term mentoring and other support services from the franchisor, whose interest in assuring success for the new location is strong. Franchise owners have prearranged access to supplies and to the discounts available in economies of scale. The reduction of the risk of failure, perilously high for start-ups, is slashed in the franchise model when the company is well known regionally or better yet nationally. A businessperson deciding whether to franchise or to start up a business must weigh these advantages against the attraction of being one's own boss.
1. It can be inferred from the passage that the author
A. deems franchise purchase a sounder investment than funding a start-up.
B. thinks that being one's own boss would disappoint most businesspeople.
C. believes that businesspeople must understand a business model before using it.
D. plans to purchase a franchise in the near future.
E. distrusts the tight control companies have over franchise owners.
A. deems franchise purchase a sounder investment than funding a start-up.
B. thinks that being one's own boss would disappoint most businesspeople.
C. believes that businesspeople must understand a business model before using it.
D. plans to purchase a franchise in the near future.
E. distrusts the tight control companies have over franchise owners.
2. The author states each of the following as an advantage of franchising EXCEPT
A. less risk of failure than with a start-up.
B. procedures that have already been confirmed as successful.
C. the protection offered by a clear contract with the franchisor.
D. the economy of scale.
E. strong support is in the interests of the franchisor.
A. less risk of failure than with a start-up.
B. procedures that have already been confirmed as successful.
C. the protection offered by a clear contract with the franchisor.
D. the economy of scale.
E. strong support is in the interests of the franchisor.
3. Which statement, if true, most seriously weakens the idea that the franchise business model does not afford franchise owners the opportunity to be their own boss?
A. Companies have the right to rescind a franchise contract if the owner fails to follow the company's procedures and service style as required.
B. After a franchise is successfully started, the company requires less hands-on control over daily operations.
C. Entrepreneurs running start-ups are often restricted by market conditions and local regulations and must abide by operating procedures mandated by their insurers and financiers.
D. Franchise owners sometimes have opportunities to move into the company's management structure and advance to high positions.
E. Successful franchise owners may eventually run several franchise locations.
A. Companies have the right to rescind a franchise contract if the owner fails to follow the company's procedures and service style as required.
B. After a franchise is successfully started, the company requires less hands-on control over daily operations.
C. Entrepreneurs running start-ups are often restricted by market conditions and local regulations and must abide by operating procedures mandated by their insurers and financiers.
D. Franchise owners sometimes have opportunities to move into the company's management structure and advance to high positions.
E. Successful franchise owners may eventually run several franchise locations.
GMAT Club's Reading Comprehension Challenge 2022
10 Days | 20 Passages | Win Prizes | Get Better at GMAT
Passage # 10 | Date: 05 March 2022
Click here for more details and master thread
10 Days | 20 Passages | Win Prizes | Get Better at GMAT
Passage # 10 | Date: 05 March 2022
Click here for more details and master thread
05 Mar 2022, 08:43
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1. It can be inferred from the passage that the author
A. deems franchise purchase a sounder investment than funding a start-up.
The author is neither supporting nor belittling any business models just discussing the various business models.
B. thinks that being one's own boss would disappoint most businesspeople.
No where any such thing has been said or discussed.
C. believes that businesspeople must understand a business model before using it.
"Businesspeople who dream of being their own boss may consider franchise opportunities without understanding the nature of this business model."
D. plans to purchase a franchise in the near future.
We cannot infer that as discussed in A.
E. distrusts the tight control companies have over franchise owners.
No where any such thing has been discussed.
2. The author states each of the following as an advantage of franchising EXCEPT
A. less risk of failure than with a start-up.
Has been discussed.
B. procedures that have already been confirmed as successful.
Have been discussed.
C. the protection offered by a clear contract with the franchisor.
The contract has been mentioned or discussed just to point out why franchising is not like entrepreneurship, so it's more like a disadvantage than an advantage.
D. the economy of scale.
Discount is being offered by the franchisor. -Advantage.
E. strong support is in the interests of the franchisor.
As the franchisor is trying to expand the business in the new location the franchisor will provide all the support to the franchise to make it succesuful. - Advantage.
3. Which statement, if true, most seriously weakens the idea that the franchise business model does not afford franchise owners the opportunity to be their own boss?
A. Companies have the right to rescind a franchise contract if the owner fails to follow the company's procedures and service style as required.
It strengthens the idea.
B. After a franchise is successfully started, the company requires less hands-on control over daily operations.
Which means a transition from franchise owner to boss. -Weakening the idea. Let's keep it.
C. Entrepreneurs running start-ups are often restricted by market conditions and local regulations and must abide by operating procedures mandated by their insurers and financiers.
Entrepreneurship model has been discussed here and we are concerned about the franchise model.
D. Franchise owners sometimes have opportunities to move into the company's management structure and advance to high positions.
It simply means you cannot be your own boss. So strengthening the idea.
E. Successful franchise owners may eventually run several franchise locations.
Even though they may run several franchise locations they are still bound by the contract.
A. deems franchise purchase a sounder investment than funding a start-up.
The author is neither supporting nor belittling any business models just discussing the various business models.
B. thinks that being one's own boss would disappoint most businesspeople.
No where any such thing has been said or discussed.
C. believes that businesspeople must understand a business model before using it.
"Businesspeople who dream of being their own boss may consider franchise opportunities without understanding the nature of this business model."
D. plans to purchase a franchise in the near future.
We cannot infer that as discussed in A.
E. distrusts the tight control companies have over franchise owners.
No where any such thing has been discussed.
2. The author states each of the following as an advantage of franchising EXCEPT
A. less risk of failure than with a start-up.
Has been discussed.
B. procedures that have already been confirmed as successful.
Have been discussed.
C. the protection offered by a clear contract with the franchisor.
The contract has been mentioned or discussed just to point out why franchising is not like entrepreneurship, so it's more like a disadvantage than an advantage.
D. the economy of scale.
Discount is being offered by the franchisor. -Advantage.
E. strong support is in the interests of the franchisor.
As the franchisor is trying to expand the business in the new location the franchisor will provide all the support to the franchise to make it succesuful. - Advantage.
3. Which statement, if true, most seriously weakens the idea that the franchise business model does not afford franchise owners the opportunity to be their own boss?
A. Companies have the right to rescind a franchise contract if the owner fails to follow the company's procedures and service style as required.
It strengthens the idea.
B. After a franchise is successfully started, the company requires less hands-on control over daily operations.
Which means a transition from franchise owner to boss. -Weakening the idea. Let's keep it.
C. Entrepreneurs running start-ups are often restricted by market conditions and local regulations and must abide by operating procedures mandated by their insurers and financiers.
Entrepreneurship model has been discussed here and we are concerned about the franchise model.
D. Franchise owners sometimes have opportunities to move into the company's management structure and advance to high positions.
It simply means you cannot be your own boss. So strengthening the idea.
E. Successful franchise owners may eventually run several franchise locations.
Even though they may run several franchise locations they are still bound by the contract.
06 Mar 2022, 01:47
Kudos
Bookmarks
1. It can be inferred from the passage that the author
A. deems franchise purchase a sounder investment than funding a start-up.
B. thinks that being one's own boss would disappoint most businesspeople.
C. believes that businesspeople must understand a business model before using it.
D. plans to purchase a franchise in the near future.
E. distrusts the tight control companies have over franchise owners.
My Answer is C
2. The author states each of the following as an advantage of franchising EXCEPT
A. less risk of failure than with a start-up.
B. procedures that have already been confirmed as successful.
C. the protection offered by a clear contract with the franchisor.
D. the economy of scale.
E. strong support is in the interests of the franchisor.
My Answer is C
3. Which statement, if true, most seriously weakens the idea that the franchise business model does not afford franchise owners the opportunity to be their own boss?
A. Companies have the right to rescind a franchise contract if the owner fails to follow the company's procedures and service style as required.
B. After a franchise is successfully started, the company requires less hands-on control over daily operations.
C. Entrepreneurs running start-ups are often restricted by market conditions and local regulations and must abide by operating procedures mandated by their insurers and financiers.
D. Franchise owners sometimes have opportunities to move into the company's management structure and advance to high positions.
E. Successful franchise owners may eventually run several franchise locations.
My answer is E
A. deems franchise purchase a sounder investment than funding a start-up.
B. thinks that being one's own boss would disappoint most businesspeople.
C. believes that businesspeople must understand a business model before using it.
D. plans to purchase a franchise in the near future.
E. distrusts the tight control companies have over franchise owners.
My Answer is C
2. The author states each of the following as an advantage of franchising EXCEPT
A. less risk of failure than with a start-up.
B. procedures that have already been confirmed as successful.
C. the protection offered by a clear contract with the franchisor.
D. the economy of scale.
E. strong support is in the interests of the franchisor.
My Answer is C
3. Which statement, if true, most seriously weakens the idea that the franchise business model does not afford franchise owners the opportunity to be their own boss?
A. Companies have the right to rescind a franchise contract if the owner fails to follow the company's procedures and service style as required.
B. After a franchise is successfully started, the company requires less hands-on control over daily operations.
C. Entrepreneurs running start-ups are often restricted by market conditions and local regulations and must abide by operating procedures mandated by their insurers and financiers.
D. Franchise owners sometimes have opportunities to move into the company's management structure and advance to high positions.
E. Successful franchise owners may eventually run several franchise locations.
My answer is E
